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Evidence from savings accounts: banks saw the RBA cut coming

Shirley Liu 3 May 2016

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ANZ, Macquarie Bank, IMB Bank and ING Direct all cut rates ahead of today's announcement.

The Reserve Bank of Australia (RBA) today cut the official cash rate, the first change we've seen to the rate in 12 months.  At its board meeting today, the RBA cut 25 basis points, trimming the official rate down to 1.75%. Following 11 months of unchanged rates, only one expert on the finder.com.au RBA survey panel correctly forecast the cut.

See what lenders have passed on the RBA rate cut.

The change came as a surprise to many, although there were clues in the most recent CPI figures. But there was also a more subtle indication: in the run-up to this month's figures, many banks have been cutting the interest rates on their basic transaction and savings accounts. ANZ, ING Direct, Macquarie Bank and IMB Bank all reduced rates on savings accounts in the last month.

The trend isn't universal; BOQ and Bankwest both lifted rates. But there were enough changes in the largely static savings account sector, where rates are typically much less variable, to suggest that the banks won't have been entirely surprised by today's announcements.

Banks that cut interest rates ahead of the announcement

  • ANZ - Dropped bank accounts rates by 0.25%
  • Macquarie Bank - Dropped term deposit rates by 0.10%
  • IMB Bank - Dropped savings accounts rates by 0.25%
  • ING Direct - Dropped savings accounts rates by 0.25%

Banks that lifted interest rates ahead of the announcement

  • BOQ - Increased its 3 month term deposit rate to 0.35% and its 6 month term deposit rate to 0.25%
  • Bankwest - Increased its 12 month term deposit by 0.20%

You can still get a competitive interest rate, if you're willing to make the effort. Check if your current savings account is still offering a competitive deal. Since rates are so low, you may want to consider opting for a bonus saver account instead. Bonus savers typically award a higher interest rate, but usually comes with deposit and withdrawal conditions.

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