See when Australia’s biggest banks stopped paying proper interest on your savings – and what you can do about it
In recent years, Australians have seen their savings accounts struggle to keep up with the rising cost of living. With inflation on the rise, many of the country’s biggest banks have stopped paying proper interest on savings accounts, leaving customers with little to no return on their investments.
It’s no surprise that this has caused frustration among customers. After all, when you’re putting your hard-earned money into a savings account, you expect to see some return on your investment. Unfortunately, this isn’t the case with many of the major banks in Australia.
So when did this start?
The trend of banks reducing the interest rate on savings accounts began in 2018, when the Reserve Bank of Australia (RBA) cut the official cash rate. This meant that banks had to reduce the interest rate they were offering on savings accounts in order to remain competitive.
Since then, the RBA has cut the official cash rate multiple times, resulting in many of Australia’s biggest banks cutting the interest rate on savings accounts even further. In some cases, the interest rate has been reduced to as low as 0.01%.
What can you do about it?
It’s important to remember that you don’t have to accept the low interest rates offered by the major banks. There are a number of other options available to you, including high-interest savings accounts, term deposits, and online savings accounts.
High-interest savings accounts offer higher interest rates than traditional savings accounts, and usually come with fewer fees. Term deposits are similar to savings accounts, but they require you to lock away your money for a set period of time. Finally, online savings accounts offer higher interest rates than traditional savings accounts, and they usually come with fewer fees.
It’s also important to remember that banks aren’t the only option. There are a number of other financial institutions, such as credit unions and building societies, that offer competitive savings accounts.
Ultimately, the decision is yours. With a bit of research, you can find a savings account that offers a better rate of return than the major banks.