Following the RBA’s decision to lift the cash rate, Westpac and NAB are breathing new life into savings accounts.
Mortgage rates aren’t the only interest rates to rise after the RBA’s first cash rate hike in more than a decade, with Westpac and NAB being the first of the Big Four to report an increase in mortgage rates. ‘saving.
Westpac will increase the prices of its “Westpac Life”, “Westpac 55+ and Retired” products by 25 basis points from May 17, 2022.
Westpac’s new savings account rates are as follows:
- Westpac Life Savings Account will grow up to 0.50% per year
- Westpac 55+ and retiree savings account with balances of $0 to less than $9,999 will grow up to 0.30% per annum
- Westpac 55+ and Retiree Savings Account on portion of balance from $9,999 to less than $49,999 will increase up to 0.30% per annum
- Westpac 55+ and Retiree Savings Account on portion of balance from $49,999 to less than $249,999 will increase up to 0.35% per annum
- Westpac 55+ and Retiree Savings Account on portion of balance $249,999 and above will increase by up to 0.50% per annum
Chris de Bruin, managing director of Westpac Consumer & Business Banking, said it would bring much-needed relief to savers after a long period of historically low interest rates.
NAB will increase the prices of its “Reward Saver” product offering by 25 basis points beginning May 13, 2022.
This increase will result in an increase in NAB’s Reward Savings Account rate up to 0.50% per annum
“Historically low interest rates have been difficult for our savings and deposit customers, including more than 1.3 million customers with a reward savings account. We want to support them as interest rates rise again,” said Rachel Slade, NAB Group Head of Personal Banking.
Savers seduced by alternative methods
Despite an increase in the savings account rate, Australians should continue to seek other methods of saving to maximize their potential returns.
Charlie Karaboga, CEO and co-founder of blockchain-powered fintech Block Earner said that for savers, the RBA’s 25 basis point hike will not close the 5.1% inflation gap.
“Unfortunately, Australia’s inflation problems are largely caused by factors outside the country, such as the war in Ukraine, and so a rise in interest rates is unlikely to bring inflation down before a some time,” Karaboga said.
“While the rate announcement is a step in the right direction, it highlights the archaic and outdated systems through which Australians are supposed to save for life’s major milestones such as retirement, entering the labor market housing or marriage.
“As inflation and interest rates continue to rise, now is the time for Australians to reconsider their investment strategies – dividing their savings more evenly between the worlds of traditional and decentralized finance.
“It’s a game-changer, especially for millennials who have struggled to get a head start on the homeownership ladder, and who will continue to do so if they aren’t exposed to a more diverse set of ‘savings and investment opportunities.’
Need a place to store cash and earn interest? The table below shows savings accounts with some of the highest interest rates on the market.
Rates based on a savings balance of $10,000. Sorted by total interest rates. Check the providers’ websites for terms of bonus rates and applicable fees and charges. Rates correct as of May 4, 2022. See disclaimer.
Image by Joslyn Pickens via Pexels
The entire market has not been taken into account in the selection of the products above. Instead, a reduced portion of the market was considered. Products from some vendors may not be available in all states. To be considered, the product and price must be clearly published on the product supplier’s website. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au and Performance Drive are part of the Savings Media group. In the interest of full disclosure, Savings Media Group is associated with Firstmac Group. To learn how Savings Media Group handles potential conflicts of interest, as well as how we are paid, please visit the website links at the bottom of this page.