With deposits flooding in and the cost of other sources of funding very low, banks are in a position to keep cutting savings rates.
In the latest move, Canstar reports that Commonwealth Bank cut its deposit rates on its Netbank Saver and Youthsaver accounts - the fifth time the bank has cut savings rates this year.
CBA has cut the Netbank Saver rate by 5 basis points to 90 bps (a five-month intro rate of 85 bps plus a base rate of 5 bps).
It has also cut the rate on Youthsaver by 5 bps to 1.05 per cent (a base rate of 10 bps plus a bonus rate of 95 bps).
The Netbank Saver rate has been cut by a total of 75 bps this year and Youthsaver by 80 bps.
Neobank Volt also cut its savings rate last week, reducing the rate from 1.65 per cent to 1.45 per cent. Volt is still in “beta”, so only a small number of depositors are affected.
Mozo reports that over the past six months there have been a total of 1479 cuts to savings account rates. Over the past 12 months the average ongoing savings rate has fallen from 1.15 per cent to 65 bps.
According to Canstar, the top savings rates are Rabobank’s introductory rate of 2 per cent for four months (reverting to a base rate of 45 bps); Heritage Bank’s intro rate of 1.9 per cent for four months (reverting to 80 bps); MyState’s bonus rate of 1.5 per cent (on top of a base rate of 15 bps); and ING’s four month intro rate of 1.65 per cent (revering to 10 bps).