Millions of Australians left guessing as banks hide savings rate changes 

Whether it’s setting aside a little extra each month for a rainy day or retirement, having a secure savings account provides peace of mind and financial stability. Banks play a crucial role in this process, offering interest rates that help your savings grow steadily. 

But while recent headlines have focused on mortgage relief following the Reserve Bank’s latest rate cut, a quieter story unfolds for savers—and it’s not exactly good news.

The Reserve Bank of Australia (RBA) announced a 25-basis-point cut to the official cash rate. 

Within minutes, the big four banks—Commonwealth Bank, Westpac, NAB, and ANZ—were quick to trumpet their plans to pass on the full cut to variable home loan customers. 

Here’s where things get murky. Of the big four, only Westpac has disclosed what this means for its savings customers. 

The other three—ANZ, NAB, and Commonwealth Bank—have kept their cards close to their chests, leaving millions of Australians in the dark about what’s coming for their nest eggs.

It’s not unusual for banks to be a little slow off the mark when announcing changes to savings rates. After all, lower rates mean less money in your pocket and more in theirs. 

But as Sally Tindall, Canstar’s data insights director, pointed out, Westpac has at least been upfront about the changes. 

‘If history is anything to go by, most savings rates will be getting a haircut over the next few weeks,’ she said.

‘The other big banks should take a leaf out of Westpac’s book and let their savings customers know the fate of their interest rates.’

A nation of savers—but for what reward?

According to the latest data from the Australian Prudential Regulation Authority, Australians have a record $1.6 trillion in savings accounts. 

That’s up $8.3 billion from just a month ago, and a staggering $125 billion more than last year. Clearly, we’re a nation that values a rainy-day fund. 

But with interest rates on savings accounts and term deposits continuing to slide, many of us are losing money in real terms.

Mark Zukerman, director at Vado Private, puts it bluntly: ‘With interest rates on online savings accounts now typically returning around 1.5 per cent, and interest rates on term deposits across all maturities averaging just 3.1 per cent in April 2025, that exposes many savers to very low returns, potentially falling below zero given inflation of 2.4 per cent.’

In other words, even if you’re earning a little interest, rising prices mean your money isn’t going as far as it used to. And with the RBA expecting inflation to tick up again once cost-of-living support measures end, the outlook for savers is even bleaker.

Let’s break it down:  

• The average return on bank online savings accounts in April 2025 was just 1.55 per cent.  
• The best one-year term deposit rate hovered around 4 per cent, while a three-year term offered about 3.2 per cent.  
• With inflation at 2.4 per cent, many savers are barely breaking even, and some are going backwards.

And it could get worse. Markets are already pricing in another RBA rate cut by August, with at least two more expected by February next year. 

If that happens, the official cash rate could drop to 3.10 per cent, dragging down savings rates.

For mortgage holders, the rate cut is a reason to celebrate—lower repayments mean more money in your pocket each month. But for savers, it’s a different story. 

As Tindall puts it, ‘The May cash rate cut might be a reason to pop the champagne for mortgage customers; however, for savers, it’s likely to go down like a lead balloon.’

She added, ‘While there are still savings rates starting with a “5”, at this point we’re clinging on to them for dear life.’

Have you noticed your savings interest rates dropping? Are you considering switching banks, or have you found a better way to make your money grow? Share your experiences and tips in the comments below.

Also read: ‘Orwellian’ email from bank sparks fury over cash at home question