Older Aussies built up $1.62 trillion in savings…but banks are quietly cutting their returns
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More Aussies were putting money aside—yet the returns on those savings kept shrinking.
Banks weren’t just mirroring the Reserve Bank’s moves; they were racing ahead of them.
And with savings accounts now brimming, it seemed depositors were footing the bill.
ANZ slashed the interest rate on its progress saver account to 3.4 per cent on 18 July, despite the Reserve Bank of Australia leaving its official cash rate unchanged earlier this month.
Westpac trimmed its reward saver rate by 0.05 per cent in June—marking a total cut of 0.65 per cent since February—outpacing the RBA’s own 0.5 per cent reduction over the same period.
Ubank followed suit with a larger cut of 0.9 per cent so far this year, dropping its savings rate to 4.6 per cent on 15 July while trying to cushion the blow with a temporary bonus for new customers and a higher cap on account balances.
Bendigo Bank also lowered its EasySaver rate by 0.1 per cent in July, based on Canstar data.
Major banks had been quietly pulling down returns on both conditional and unconditional savings accounts faster than the RBA, narrowing the gap between the cash rate and customer returns while boosting their own margins.
Canstar’s database showed that only four banks still offered easily accessible accounts with rates of 5 per cent or more, down from a wider range earlier in the year.
Sally Tindall, data insights director at Canstar, said the shift revealed a clear trend: ‘Money in the bank is at a record high, so banks aren’t having to compete for people’s deposits.’
‘Australians are absolutely focused on putting their funds away for a rainy day [so] the banks are flush with cash.’
Banks had already pushed customers towards conditional accounts with bonus rates—then gradually chipped away at those incentives, too.
In June, a Westpac spokesperson said: ‘In making interest rate decisions, we consider a range of factors including the cost of funds and the broader market environment, balancing the needs of both borrowers and savers.’
As cost-of-living pressures eased, Australians had been funnelling a larger portion of their income into savings.
National figures from May revealed the savings ratio had climbed to its highest level since 2022.
Deposits hit a record $1.62 trillion in 2025, rising by $24 billion in the five months leading to May, according to data from the banking regulator.
Economists expected the Reserve Bank to lower interest rates by another 0.25 per cent in August—potentially pushing remaining high-interest savings accounts below the 5 per cent mark.
‘Cash rate cuts are a double-edged sword and we so often see banks [pass] that cut on to savers faster than they do to their mortgage rate customers,’ Tindall said.
If you're keeping a close eye on what your savings are earning, it's not just ANZ and Westpac making quiet moves.
One of the country’s other big banks has also adjusted its rates—and the shift could have a noticeable impact on your account balance.
Here’s a closer look at what NAB has changed, and what it could mean for your money.
Read more: NAB reveals new interest rates for account owners. This is what your savings might look like soon
When interest rates fall, are you gaining—or just helping the banks profit more?
Banks weren’t just mirroring the Reserve Bank’s moves; they were racing ahead of them.
And with savings accounts now brimming, it seemed depositors were footing the bill.
ANZ slashed the interest rate on its progress saver account to 3.4 per cent on 18 July, despite the Reserve Bank of Australia leaving its official cash rate unchanged earlier this month.
Westpac trimmed its reward saver rate by 0.05 per cent in June—marking a total cut of 0.65 per cent since February—outpacing the RBA’s own 0.5 per cent reduction over the same period.
Ubank followed suit with a larger cut of 0.9 per cent so far this year, dropping its savings rate to 4.6 per cent on 15 July while trying to cushion the blow with a temporary bonus for new customers and a higher cap on account balances.
Banks slash savings rates ahead of RBA. Image source: Pexels/Kampus Production
Disclaimer: This is a stock image used for illustrative purposes only and does not depict the actual person, item, or event described.
Disclaimer: This is a stock image used for illustrative purposes only and does not depict the actual person, item, or event described.
Bendigo Bank also lowered its EasySaver rate by 0.1 per cent in July, based on Canstar data.
Major banks had been quietly pulling down returns on both conditional and unconditional savings accounts faster than the RBA, narrowing the gap between the cash rate and customer returns while boosting their own margins.
Canstar’s database showed that only four banks still offered easily accessible accounts with rates of 5 per cent or more, down from a wider range earlier in the year.
Sally Tindall, data insights director at Canstar, said the shift revealed a clear trend: ‘Money in the bank is at a record high, so banks aren’t having to compete for people’s deposits.’
‘Australians are absolutely focused on putting their funds away for a rainy day [so] the banks are flush with cash.’
Banks had already pushed customers towards conditional accounts with bonus rates—then gradually chipped away at those incentives, too.
In June, a Westpac spokesperson said: ‘In making interest rate decisions, we consider a range of factors including the cost of funds and the broader market environment, balancing the needs of both borrowers and savers.’
As cost-of-living pressures eased, Australians had been funnelling a larger portion of their income into savings.
National figures from May revealed the savings ratio had climbed to its highest level since 2022.
Deposits hit a record $1.62 trillion in 2025, rising by $24 billion in the five months leading to May, according to data from the banking regulator.
Economists expected the Reserve Bank to lower interest rates by another 0.25 per cent in August—potentially pushing remaining high-interest savings accounts below the 5 per cent mark.
‘Cash rate cuts are a double-edged sword and we so often see banks [pass] that cut on to savers faster than they do to their mortgage rate customers,’ Tindall said.
If you're keeping a close eye on what your savings are earning, it's not just ANZ and Westpac making quiet moves.
One of the country’s other big banks has also adjusted its rates—and the shift could have a noticeable impact on your account balance.
Here’s a closer look at what NAB has changed, and what it could mean for your money.
Read more: NAB reveals new interest rates for account owners. This is what your savings might look like soon
When interest rates fall, are you gaining—or just helping the banks profit more?
