‘Lower, slower or conditional’: Watchdog to probe banks’ offers to savers as cash rate rises

RateCity research director Sally Tindall said while some of the savings accounts at the big four banks had gone up by the full 3 per cent and, in some cases, risen more than what the RBA had prescribed, this was not across the board. She called for more consistency.

“[Banks] shouldn’t be picking and choosing, the complacent savers miss out,” she said. “I wouldn’t say competition is not existent in the savings sector, it’s just that some banks are hoping that complacent savers won’t notice they are on a dud rate.”

“If you look across entire market, you have banks like Virgin Money and ING offering ongoing savings rates with 4.6 per cent or 4.55 per cent respectively, so savers do not need to wait for an inquiry to get a good deal.”

Tindall hoped the inquiry would shine a spotlight on the widening gap between the lowest and highest savings rates, and would put pressure on banks to pass on future official rate rises across all accounts which was “ultimately a good thing”.

“[The inquiry] will alert consumers to the fact they might not be on a competitive rate and put pressure on the banks to do the right thing with future rate hikes that come our way.”

In response to the inquiry, the Australian Banking Association said each bank considers funding and regulatory requirements when deciding what they are able to offer customers. The spokeswoman said bank funding needs differed and changed overtime, which would also impact how much they were able to offer on deposit rates.

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NAB’s head of everyday banking, Paul Riley, said NAB had made more than 50 increases on its savings and term deposit rates since May, urging customers to take time to check out what other offers were on the market.

“The rise in the cost of living has clearly prompted customers to be more price savvy and you can see banks across the board responding to that,” he said.

“The most competitive rate depends on how much a customer wants to put away in savings and how quickly they want to access their funds as cash.”

ANZ said it would fully co-operate with the inquiry, pointing out it offered customers a rate of 3.75 per cent for balances less than $250,000 on its ANZ Plus Save account, and a 12-month term deposit with a rate of 4 per cent.

Westpac and CBA did not respond to request for comment.

In 2019, then treasurer Josh Frydenberg tasked the ACCC with investigating the banks’ refusal to pass on a series of interest rate cuts to customers.

An ACCC interim report found that maintaining profits was a major consideration for the big four banks as they weighed whether to reduce mortgage rates in line with Reserve Bank of Australia cash rate cuts during 2019.

On Wednesday, Chalmers urged customers to look around for a better offer if they felt their bank wasn’t giving them a fair deal.

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