Aussie banks offer higher payouts on term deposits for savers

Font size :

As expected, the Reserve Bank of Australia cut its cash rate to a new record low of 1.5 per cent on Tuesday following weak inflation data. But instead of passing the full interest rate reduction to its mortgage customers, Australia’s four major banks said that they will offer higher payouts on some term deposits for their savers who are no longer willing to stomach low returns on their cash.

Mortgage holders lost out this time, as variable mortgage rates were only reduced by 10 to 14 basis points while business costs are set to drop by 10 to 13 basis points. The banks’ choice to favour savers over borrowers complicates the transmission of RBA policy moves throughout the economy.

“Optically, the higher deposit rates look good from a saver’s perspective and banks need stable funding as well,” said Omkar Joshi, an investment analyst at Watermarks Funds Management. “Most of the margin sacrificed by the lenders will be largely compensated by decreasing rates on shorter-term term deposits and by not passing on the full RBA cut to mortgage customers.”

Westpac raised its rates on one, two, and three-year term deposits by 45 to 55 basis points, while CBA’s increases for similar products range from 50 to 55 basis points. ANZ plans to an increase of 60 to 75 basis points on its products, while NAB savers can also expect an increase of 85 basis points.

According to ANZ’s head of Australian business Fred Ohlsson, “Regulatory and funding costs have continued to rise and we need to remain attractive to depositors.”

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

CBA unveils new repayment simulator CBA unveils new repayment simulator

The simulator will show customers the differences between different types of repayments Read more

How to tell when a housing market is cooling How to tell when a housing market is cooling You need to check clearance rates, listings, and the price gap, among other factors ... Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

More mortgage news and articles

Sponsored Links

Tuesday, Sep 26, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
  • How much do you want to borrow?
  • How much deposit do you have?
  • How much is your house worth?
  • How much do you still owe on your mortgage?
  • What type of mortgage do you have?

  • How much is your new home?
  • How much do you want to borrow?
  • How soon do you want a mortgage?
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords