NAB Cuts Savings Rate Following RBA’s Rate Adjustments
The National Australia Bank (NAB) has reduced the interest rate on its Reward Saver account by 0.05 per cent, bringing the maximum rate down to 4.35 per cent. This reduction follows a more significant 0.25 per cent cut enacted on May 23, totalling a 0.30 per cent decrease overall after the Reserve Bank of Australia’s (RBA) cash rate adjustment last month.
While NAB’s recent cut might seem minor, it reflects a broader trend of declining savings rates across the banking sector. Canstar research indicates that several other banks, including ING and Rabobank, have made cuts even larger than those prescribed by the RBA.
Sally Tindall, Canstar’s data insights director, commented on the move, stating, "This shows that banks don’t require a cash rate change to alter their interest rates. While it is a small adjustment, it is nonetheless disappointing." The average savings rate recorded in Canstar’s database currently stands at 3.07 per cent, with only six banks maintaining ongoing rates of 5 per cent or above.
Looking ahead, Tindall mentioned the potential for further RBA rate cuts, predicting that savings rates beginning with a ‘5’ could disappear by the end of winter if the RBA enacts reductions in July or August. NAB predicts that the RBA will trim rates again in the subsequent months, potentially lowering the cash rate to 3.10 per cent by November.
On the other hand, Commonwealth Bank of Australia (CBA), Westpac, and ANZ foresee a delayed approach, anticipating the next RBA cut in August. Westpac has even adjusted its forecast, now expecting cuts in August, November, February, and May of the following year; conversely, CBA and ANZ believe that only two more cuts will occur in this current cycle.
The BOQ Future Saver account, targeted at individuals aged between 14 to 35, currently provides the highest ongoing rate at 5.10 per cent, despite a recent reduction from 5.25 per cent. To qualify for this maximum rate, customers are required to deposit at least $1,000 and complete a minimum of five transactions from a linked account.
Additionally, other financial institution accounts offering rates of 5 per cent or more include BCU Bank Boss Saver, P&N Bank Savvy Saver, Westpac Life Spend & Save, Move Bank Growth Saver, and ING Savings Maximiser.
Term deposit interest rates have also seen declines, with over 50 banks—including all of the Big Four banks—implementing rate cuts within the last month. Tindall highlighted that term deposit rates are decreasing at a faster pace than at-call savings rates, as banks factor in anticipated cash rate cuts into fixed-rate terms.
In summary, NAB’s recent rate cuts on savings highlight a troubling trend of decreasing interest rates across Australia’s banking sector, driven by ongoing adjustments to the RBA’s cash rate. As the outlook remains uncertain, consumers should stay informed about prospective changes that could further impact their savings.
