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Jim Chalmers, the savers friend
A bout of jawboning of major bank CEOs on Tuesday by federal treasurer Jim Chalmers appears to have yielded a swift, albeit mixed, return for millions of Australian depositors after five leading banks increased rates on selected deposit products following the RBA’s official rate move.
In a ploy reminiscent of Peter Costello’s 11-year reign as treasurer, Chalmers lobbied the four big bank bosses on Tuesday afternoon urging them to pass on the full 50 basis point official increase to deposit customers.
He later tried to shame them into action with public commentary at a media conference.
“We do want to see these interest rate hikes passed on to savers because the only silver lining in all of this is for people who rely on their savings,” he said.
“We want to see that passed on when it comes to day-to-day savings accounts and also term deposits.
“Frequently there's been an increase on the term deposit front but not always on the day-to-day savings accounts. We do want to see that passed on.”
The tactic seems to have worked in a limited kind of way.
On Wednesday morning Commonwealth Bank improved rates on a limited range of savings accounts, although most term deposit products were not re-priced.
From 15 July, CBA will increase the rate on the GoalSaver bonus interest account by 0.5 per cent to 1.25 per cent.
It will also improve a ‘special offer’ on 15-month term deposit accounts to 2.5 per cent.
However. CBA’s rates for 12 month term and 24 month term deposits for balances up to A$50,000 will remain stuck at 1.2 per cent and 1.45 per cent, respectively.
ANZ has boosted rates on its Progress saver bonus interest account by 0.5 per cent to 1.15 per cent, while the rate on the recently launched ANZ Plus account will also rise by 0.5 per cent to 2 per cent.
ANZ has improved its rate offer on only one fixed deposit product – its 11 month term account – to 2.5 per cent.
From 15 July, National Australia Bank will increase the rate on 12 month term deposits by 0.25 per cent to 2.5 per cent.
It has also increased the rate on its reward saver account by 0.5 per cent to 1 per cent for balances up to $50,000.
This means NAB is set to continue owning the least competitive bonus saver offer among the major banks.
The rate on Westpac’s bonus interest account was increased to 1.35 per cent last night.
Collectively, the major banks’ bonus interest account offers are inferior to the offers of most small banks, including Tasmanian-based deposit-taker, MyState.
MyState yesterday increased the rate on its bonus interest account to 2.1 per cent.
“We’ve been able to offer two increases to term deposit rates in June, and have attracted new customers as a result,” said MyState chief executive, Brett Morgan.
“We’re delivering larger returns for our customers who want that stability in managing and growing their savings over time.”
Macquarie Bank, which has trumped the major banks with deposit offers this year, is boosting its 12 month term deposit rate to a sector-leading 3.25 per cent for balances up to $1 million.
Macquarie’s flagship transaction account will also offer a higher rate than the major banks’ bonus interest accounts.
Macquarie has repriced the rate on the transaction account to 1.75 per cent for balances up to $250,000.
The intransigence of the major banks on their deposit offer opens up political and reputational risks for their brands given that they each repriced their standard variable mortgage rates in line with the RBA’s 0.5 per cent official rise.