Savings account interest rates dip below inflation
Banks make it tougher for Aussies to save cash.
Australia's current annual inflation rate sits at 1.30%.
This consumer price index (CPI) rate is well below the Reserve Bank of Australia's (RBA) target of 2-3%.
The RBA's average retail deposit and investment rate for savings accounts and online savings accounts (holding $10,000) fell 0.05 to 1.25% in December 2016.
This means the average interest paid to Aussie savers is below the national rate of inflation.
The last time this occurred was June 2014, when CPI was 3% and average savings rates were just 2.50%.
Bankwest TeleNet saver customers receive 1.50% interest.
Currently, ME's online savings account has a standard variable rate of 1.30%, equal to the inflation rate.
If you're curious as to how changes in the cash rate affect inflation, check out our in-depth explanation.
Visit our RBA cash rate page for the latest news, updates and forecasts on the upcoming announcement.
- Government to allow smaller players to call themselves a “bank”
- Australians have already lost over $13 million to scams this year
- Think twice before claiming your laundry as a tax deduction
- CBA takes the lead for mobile banking in Australia
- Money hack: Get $75 for opening a new ING Direct bank account