If you’re among the many Australians diligently tucking away your hard-earned dollars in a savings account, you might want to brace yourself for more disappointing news.
NAB, one of the country’s big four banks, has announced its second rate cut for savers in less than a month, leaving many wondering if their nest eggs are being quietly chipped away.
NAB’s Reward Saver account, a popular choice for those looking to grow their savings, has seen its maximum interest rate drop by another 0.05 to 4.35 per cent.
This follows a more significant 0.25 per cent cut on 23 May, which was in line with the Reserve Bank of Australia’s (RBA) official interest rate reduction. That’s a 0.30 per cent reduction in less than 30 days.
For everyday Australians relying on their savings to supplement their income or prepare for retirement, these cuts are more than just numbers—they’re a real hit to the hip pocket.
While the RBA’s decisions often set the tone for interest rates across the board, this latest move from NAB shows that banks don’t always wait for the central bank to act before making changes.
As Canstar’s data insights director, Sally Tindall, pointed out, ‘It shows that banks don’t need a cash rate change to move the goalposts for customers. It’s a small move but a disappointing one nevertheless.’
Banks are under pressure to balance the needs of borrowers and savers, and with the RBA signalling a possible further rate cut as soon as July, the outlook for savers is looking increasingly bleak.
If you’re feeling frustrated by shrinking returns, you’re not alone. According to Canstar, Australia’s average ongoing savings rate is now an uninspiring 3.07 per cent.
However, a handful of banks still offer ongoing rates above 5 per cent, though you’ll need to read the fine print. Here are some of the current standouts:
- BOQ Future Saver
- BCU Bank Boss
- P&N Bank Savvy Savers
- MOVE Bank Growth Saver
- ING Savings Maximiser
It’s worth noting that these accounts often come with strings attached, such as minimum monthly deposits, transaction requirements, or age restrictions.
For example, Westpac’s Life Spend and Save account offers a 5 per cent rate, but only for those aged 18 to 29.
These options may be out of reach for those of us with a few more candles on the birthday cake.
Term deposits have long been a favourite for those seeking certainty and security.
But as Tindall warned, ‘Term deposit rates are, unsurprisingly, falling faster than at-call savings rates, as banks continue to bake in further cash rate cuts into the fixed rate term.’
If you’re considering locking in a term deposit, now might be the time to act. Rates will likely keep dropping in the weeks ahead, so waiting could mean missing out on the best of what’s left.
What should savers do now?
With savings rates on the slide and the RBA potentially set to cut again, shopping around is more important than ever.
Don’t just accept what your current bank offers—compare rates, read the terms and conditions carefully, and consider whether you’re willing to jump through a few hoops to secure a better return.
Whether you’re retired or approaching retirement, reviewing your overall financial strategy is also a good time.
Consider speaking with a financial adviser to ensure your savings are working as hard as possible for you, and to explore other options such as government bonds, annuities, or even dividend-paying shares (bearing in mind the risks involved).
Are you feeling the pinch from falling savings rates? Have you found a bank or account still offering a decent return? Or are you considering moving your money elsewhere? We’d love to hear your thoughts and experiences—share your story in the comments below.
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