A headline savings rate beginning with a 5 is now a feature of the normalising of interest rates in Australia, thanks to some (restrained) price leadership from ING.
The bank on Friday said it would lift the rate on its Savings Maximiser account by 20 bps to 5.00 per cent. This move is 5 bps less than the RBA’s hike in the cash rate last Tuesday. This rate is also only available on balances up to A$100,000, with the bank’s maximum rate now 3.7 per cent on balances above this level.
When this ING rate change takes effect tomorrow, “it will be the highest ongoing savings rate available to all adults” comparison service RateCity said.
Bank of Queensland’s Future Saver offers a higher ongoing rate of 5.15 per cent, however, this account is only available to people aged 14 to 35 on balances up to $50,000.
ING’s new best rate is priced at a spread of 75 bps to 85 bps on the corresponding savings products of major banks (all of whom repriced by 25 bps last week).
Once the brightest disruptor in the banking industry, ING’s star has faded amid sharper competition (especially from Macquarie Bank), as the chart on the market share of deposits shows.