ANZ has shocked the savers with a very high rate cut. The rate cut is much bigger than that issued by the Reserve Bank of Australia at the beginning of November. While the bank has sliced the headline savings rates on two, ANZ has introduced a five-month rate of 0.45% before moving to a rate of 0.05%.
RateCity research director Sally Tindall stated that the slashing of rate cuts was a “hard pill to swallow”. She added:
“The bank has refrained from cutting its base rates, which is a small blessing, but regular savers who do the right thing to qualify for the maximum rates are going to find their interest has been slashed.”
The RBA lowered the official cash to 0.1%. This is supposed to motivate the banks to offer cheaper lending rates to their customers. However, this also has a downside, since banks will start suffering monetary losses from expensive interests.
According to RateCity, Westpac offers the highest rate at 0.75%. NAB is also very close enough, refusing to adapt to RBA rates.
Ms. Tindall believes that these rates issued by Westpac and NAB won’t last long. They will be forced to adapt to a new environment. She said:
“It’s not easy operating in a low-rate environment where profit margins are feeling the squeeze, but there aren’t many winners on the back of this month’s rate cut,” Ms. Tindall said. “Savings rates are under fire, most mortgage customers are unlikely to get relief, and credit card rates haven’t moved a muscle.”