Look beyond the big banks for the best savings rates

The central bank last cut its official interest rates last November, from 0.25% to 0.1%.

Westpac cut interest rates on its savers and term deposits last week, as did its subsidiaries St George, Bank of Melbourne, Bank SA. Commonwealth banks cut rates late last month, after slashing savings rates for more than 10 months.

Sally Tindal, research director at RateCity, says 24 financial institutions cut their rates in just one month. “As a result, the average running savings rate is now only 0.3% – the lowest on our records,” says Tindal.

Canstar’s Mickenbecker says better interest rates can be found elsewhere, provided savers are prepared to look beyond the big banks.

“Savings with authorized deposit-taking institutions are government guaranteed up to $ 250,000, so savers don’t necessarily need to limit their consideration to banks they recognize,” he says.

For example, Virgin Money’s Boost Saver pays 1.5% for the first three months, and then 1.2% thereafter, as long as the conditions are met.

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There are also special offers for young savers. For example, Westpac’s Life account offers 18-29 year olds a rate of up to 2.5%, and BOQ’s Fast Track Starter offers a rate of up to 2.5% to 14-24 year olds. Both accounts have conditions.

While the official cash rate is unlikely to start rising until at least 2024, interest rates set by money markets could start rising next year, experts say, which could translate into higher savings rates.

Shane Oliver, chief economist at AMP Capital, says vaccinations offer a way out of blockages, and that would lead to a world where much of the savings would start being spent again.

“If we start to see a tighter job market and upward pressure on inflation, money market interest rates would start to rise, which would be a signal for banks to start raising their prices. interest rate. [savings interest] rate, ”says Dr. Oliver.

• The advice given in this article is general in nature and is not intended to influence readers’ decisions regarding investments or financial products. They should always seek their own professional advice that takes their personal circumstances into account before making financial decisions.