No RBA rate cut leaves Australian savers $300 better off
If you're trying to save money (perhaps for a house deposit), the RBA keeping the cash rate on hold is good news. Here's why.
The RBA has today decided to again keep the cash rate on hold at 3.60%, like it did at its last two meetings in November and September.
For homeowners with a mortgage to pay, this is bad news as it means their home loan rate is unlikely to be reduced.
But for people with cash in the bank in a savings account, it's good news for the same reason - your rate is unlikely to be reduced.
No rate cut = no loss of interest for Aussie savers
When the RBA cuts the cash rate most banks cut their savings account rates too, which is what happened earlier this year.
A lower savings rate means you're earning less interest on your cash.
When the RBA cuts the cash rate it usually does it by 0.25%.
By keeping the cash rate on hold at its last 3 meetings, that's a 0.75% interest rate cut that you've avoided on your savings account.
Let's say you've got one of the top savings rates on the market right now at 5.00% p.a.
If we had seen rate cuts at the last 3 RBA meetings your savings rate would likely be 4.25% p.a. instead.
Based on the average savings balance of $40,700 (according to Finder's November data) and a monthly deposit of $1,000, that would be around $25 less interest for you each month.
And over the year, those 3 rate cuts would have cost you around $300 worth of interest.
Want a savings account with no hoops to jump through?
Check out these savings accounts with no conditions to meet.
Top savings rates in December
If your savings account rate is below 4% p.a., you can easily earn more interest by switching to an account with a better rate. Here are a few of the top offers at the moment.
1. Ubank Save: 5.10% p.a.
Earn 5.10% p.a. for the first 4 months (for new customers), then 4.35% p.a. These bonus rates are availale on balances up to $1 million, when you grow your balance each month.
2. Westpac Life - 5.00% p.a.
Earn an ongoing bonus rate of 5.00% p.a. for customers aged 18-34, on balances up to $30,000. To earn the bonus interest rate you need to make a deposit each month, grow your balance and make 20 transactions from the linked Westpac Choice account.
3. ING Savings Accelerator - 5.00% p.a.
Earn 5.00% p.a. for the first 4 months on balances between $150k - $500k, followed by an ongoing rate of 3.95% p.a.
4. Bank of Queensland Future Saver account 4.75% p.a.
Earn an ongoing bonus rate of 4.75% p.a. on balances up to $50,000 for customers aged 14-35. You need to deposit $1,000 a month and make 5 transactions from the Bank of Queensland bank account.
5. ING Savings Maximiser - 4.75% p.a.
Earn an ongoing bonus rate of 4.75% p.a. on balances up to $100,000 when you deposit $1,000 a month, grow your balance and make 5 transactions from the ING Orange Everyday account each month.
If these accounts aren't right for you, you can compare 100+ savings accounts to find one that suits.
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