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%.
Last week, ING reduced interest rates for both personal and business term deposit accounts.
Despite the cuts, savings maximiser and business optimiser interest rates (1.60%) remain above inflation.
As do Citi's online saver (1.70%), ultimate saver (1.65%) and ultimate business saver accounts (1.65%).
HSBC's serious saver (1.60%) and flexi saver (1.50%) accounts are returning relatively favourable rates.
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.
ANZ's online saver and St.George's SENSE account are offering 1.25% interest on available balances.
NAB's iSaver and CBA's NetBank saver are delivering 1.20% interest to customers, also below inflation.
Westpac's eSaver, St.George's maxi saver and BankSA's maxi saver interest is lower still, at 1.05%.
However, these rates exclude any bonus introductory interest and conditional or limited-time offers.
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.
Put more money in your pocket by comparing leading rates, fees and charges, bonus interest and savings incentives using finder.com.au's helpful and insightful banking comparison guide.
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