Household deposits in decline

Depositors are growing tired of earning two or three per cent on their deposits and are taking their money out of savings accounts.

The Australian Prudential Regulation Authority's latest banking statistics show that banks' household deposit balances have fallen by 0.8 per cent over the past two months.

Some of that fall is due to a reclassification by ANZ, which saw the value of its household deposit book fall from A$105.5 billion in May to $98.5 billion in June.

However, 18 of the 35 banks in the APRA survey suffered deposit outflows in May and June.

Running against the trend, Commonwealth Bank's deposit book grew by 0.9 per cent over the two months, Macquarie Bank's book grew by 0.3 per cent. ME's by 6.3 per cent, RaboDirect's by 3.7 per cent, Suncorp's by 0.7 per cent and Police Bank's by 1.4 per cent.

According to the latest ME Household Financial Comfort Report, the proportion of households with cash savings of between $10,000 and $30,000 fell from 16 per cent in December last year to 11 per cent in June.

The proportion with less than $1000 in cash savings jumped from 29 per cent to 34 per cent over the same period and the proportion with $1000 to $10,000 rose from 27 per cent to 28 per cent.

Among households making regular savings, the average amount fell from $773 a month in December to $745 a month in June.