Big banks drag their feet on passing rate rises along to savers
Major bank customers are “getting fleeced” as lenders pass on Reserve Bank rate hikes to mortgage borrowers but remain highly selective when passing them on to savers, according to RateCity research director Sally Tindall.
On Thursday, Commonwealth Bank and Westpac passed on the RBA’s latest rate hike to borrowers, following similar action by ANZ and NAB earlier in the week, The Australian reported.
All of the big four banks passed on the full 25-basis-point hike to customers.
However, the banks only passed the hikes on to a limited number of deposit and savings accounts, despite pressure from the Albanese government to pass the hikes on to a majority of accounts. The move is likely to draw the ire of Treasurer Jim Chalmers, The Australian reported.
The Australian Competition and Consumer Commission is set to probe the issue at the government’s request, as the banks have dragged their feet on raising rates for deposit products while passing on all nine rate hikes to borrowers in full.
“It’s just exacerbating the current problem,” Tindall told The Australian. “Customers don’t need their banks playing games with them … for many Australians it will require them to move accounts [to benefit from higher rates].”
Tindall said that “complacent savers” were still earning ultra-low interest rates on their accounts, because banks were only passing on the RBA’s hikes to a select few deposit products.
“They’re getting fleeced,” she said.
A RateCity analysis found that 15 banks were offering a rate of more than 4% to all adult customers, although that may increase as smaller banks apply their own rate changes, The Australian reported.
However, for those with online savings accounts at the big four banks, the highest ongoing rate earned is CBA’s 1.6%. The lowest is ANZ’s 0.55%.
A Canstar analysis found that based deposit accounts across the banking sector had risen by an average of only 1.83%, compared to 3.25 percentage points in RBA hikes since May.
CBA, which will hike mortgage rates by 25 basis points effective Feb. 17, is also lifting the rate on its GoalSaver account, with bonus interest, to 4% per annum in an attempt to catch up with the RBA hikes, The Australian reported. Customers must ensure that the balance at the end of the month is higher than at the beginning of the period in order to earn the bonus interest – otherwise they earn only 0.25% per annum.
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CBA is also raising rates on its Youthsaver account to 4%.
“The savings rates increases we are announcing today build on higher rates we have announced across a number of savings products during the past few months,” CBA head of retail banking Angus Sullivan told The Australian.
But while the bank has raised rates on those specialty products, its popular online savings account is unchanged at 1.6%.
Macquarie Bank, which raised variable home loan rates by 25 basis points on Thursday, was the only major bank to pass through an across-the-board change to its everyday savings account, The Australian reported. The Macquarie account will see a rise of 10 basis points to 3.8% on balances up to $250,000.
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