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HomeNewsRBA interest rate hike: NAB won’t pass on increase to savers

RBA interest rate hike: NAB won’t pass on increase to savers

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With the latest cash rate increase by the RBA, one bank’s “disgusting” move shows how Aussies are facing a double blow to their finances.

The Reserve Bank on Tuesday raised the official cash rate by another 25 basis points to 3.35 per cent, the ninth consecutive monthly increase in an effort to combat soaring inflation.

Since May last year, the interbank rate has increased by 325 basis points from its historic low of 0.1 per cent, marking the fastest and largest rate hiking cycle on record.

But as the major banks rush to pass on each hike to their increasingly stretched borrowers, savers are routinely overlooked.

On Tuesday night, NAB announced it was raising its standard home loan rate by the full 25 basis points, effective from February 17 — but only that its savings and term deposit rates were “continually under review”.

The announcement was met with backlash on social media.

“Why are you rats so quick to pass onto home loans but term deposits are under review? Absolute grubs,” one Twitter user replied.

“No delay in lifting your loan rates but deposits are continuously under review. Disgusting, this is why people do not trust banks,” another said.

“How about you increase deposit rates substantially now? None of this ‘constantly reviewing’ BS … you’re quite quick off the mark increasing loan rates, after all,” a third wrote.

ANZ, for its part, announced it would be raising rates for both its variable home loan and “some” savings customers — those on the ANZ Plus Save account for balances less than $250,000 — by 25 basis points to 4 per cent per annum, effective February 14.

Mozo banking expert Peter Marshall said while most banks were generally passing on the cash rate increases to savers, it was a “bit of a mixed story”.

“When you look at their savings account rates, their base rates — the rate everyone can get if you put money into an account with no hurdles or no limits — those rates are not increasing by much at all across most of the banks,” he said.

Instead, most of the savings are only available as bonus rates, which require the customer to meet particular criteria, such as making a certain amount of monthly deposits or transactions.

“So people who are aware of their options and making a bit of an effort are doing OK,” said Mr Marshall. “It’s the people who are not actively managing their savings and getting the best deal, they are not doing OK.”

In general, however, Mr Marshall said the bonus savings rate requirements were “not unreasonable” for a large portion of the population.

“If you’re in a regular job and putting a bit of money away each month, most of the accounts have fairly easy conditions on them,” he said.

He added that there was a “fair bit of competition for savings at the moment” as the banks looked to beef-up their Australian loan books in the face of rising international borrowing rates.

ANZ and Westpac were the better of the big four, he argued.

RateCity research director Sally Tindall said NAB had “been quick to announce hikes for its home loan customers, but, once again, left savers in the dark”.

“NAB savings customers should not have to put up with this,” Ms Tindall said

“Will they hike? Won’t they hike? If you’ve got your hard-earned cash in the bank, you want it to be upfront so you can make an informed decision. If you’ve got a Reward Saver or an iSaver account, tweet, email or call the bank to find out whether the bank is going to pass this RBA hike on to you.”

Ms Tindall said after the latest rate hike, a “decent ongoing savings rate” should be over 4 per cent. “Anything less, and it could be time to break up with your bank,” she said.

Since May last year, the standard savings rate for each of the big four has increased roughly in line with the cash rate, according to RateCity data.

Prior to this week’s RBA decision, CommBank’s GoalSaver had increased from 0.25 per cent in May 2022 to 3.25 per cent.

Westpac’s Life increased from 0.25 per cent to 3.75 per cent, NAB’s Reward Saver from 0.25 per cent to 3.25 per cent, and ANZ’s Progress Saver from 0.15 per cent to 2.5 per cent.

As of Monday, the best savings rate available was 4.6 per cent with Virgin Money’s Boost Saver. To get the maximum rate, the customer must deposit more than $2000 and make five or more purchases in the linked bank account perth month.

ING’s Savings Maximiser offers a rate of 4.55 per cent, with a $1000 monthly deposit and five purchase requirement.

In its statement on Tuesday, NAB stressed it had “made more than 50 increases across savings products in the past nine months”.

NAB personal banking group executive Rachel Slade said the bank acknowledged the RBA’s actions “to bring inflation under control by increasing the cash rate but recognise that there are some Australians who will find this challenging”.

“I encourage anyone who is worried about their situation to reach out to their bank,” she said.
“What we do know is that people are more engaged with their finances than they’ve been in a long time and that they are making their own adjustments to spend more ‘thoughtfully’ on non-essential purchases. At NAB, we have a dedicated team who take the time to listen to each customer’s individual situation and are able to offer tailored solutions — whether that’s reduced payment arrangements, payment breaks or restructuring their loan.”

Last week, ANZ increased its 12-month Advance Notice Term Deposit rate to 4.1 per cent, and the bank says it “continues to review other deposit rates”.

“At a time of increased cost of living and rate changes, some customers will be feeling greater financial pressure,” ANZ retail group executive Maile Carnegie said.

“We urge anyone facing difficulties to speak with our expert teams to discuss the options available to support them and their specific circumstances as early as possible. We know many customers are looking closely at savings rates.”

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