In a move that has surprised many, ANZ Bank has announced a reduction in its savings account interest rates, joining other major like NAB and Bendigo in a similar trend. Despite the Reserve Bank of Australia (RBA) holding the cash rate steady at 3.85%, they have opted to lower interest rates for savers. This shift, especially in the midst of an uncertain economic landscape, has left many customers frustrated as their expected returns continue to shrink.
Interest rate changes from major banks have been a significant concern for Australian savers. The RBA’s decision to hold the cash rate steady was anticipated to offer a reprieve for many, but instead, savers are seeing their savings grow at a slower pace. While these rate cuts may seem minimal on paper, they have sparked concerns about the future of savings accounts as more cuts may be in store.
ANZ Joins NAB and Bendigo in Rate Cuts
ANZ recently announced a 0.10% reduction to its Progress Saver account, bringing the maximum rate down to 3.40%. This follows a similar pattern seen in recent weeks, as both NAB and Bendigo Bank made cuts to their own savings rates. NAB, for example, reduced the rate on its Reward Saver account by 0.05% to 4.35% in June. Bendigo Bank also lowered its EasySaver account rate by 0.10% in early July, bringing it to 3.05%.
These cuts are being implemented quietly, leaving many savers frustrated, as they had expected their savings to benefit from the RBA’s decision to hold the cash rate. While the decision by the banks is seen as a response to internal economic factors, the cuts are creating tension between it and their customers.
The Hidden Impact on Savers
While rate cuts of 0.05% to 0.10% may seem insignificant at first glance, for savers trying to maximize their returns, even minor reductions can have a noticeable impact over time. Canstar’s data insights director, Sally Tindall, pointed out that savers are now bearing the brunt of these cuts, which follow two significant cash rate reductions earlier this year. “While the spotlight has been firmly on mortgage holders, savers — which are the majority of Australians — have quietly been taking hits of their own,” Tindall said.
These cuts, though small, come as a blow to savers who have been diligently meeting monthly conditions and are doing all the “right things” to earn higher rates. The news that some of Australia’s biggest banks are quietly reducing savings interest rates, despite the RBA’s hold, has left many feeling disillusioned with their financial institutions.
ANZ bank joins NAB in cutting interest rates despite RBA hold: ‘Frustrating’ https://t.co/FavtABJ4tq
— Yahoo Finance Australia (@YahooFinanceAU) July 18, 2025
The Outlook for Savings Rates
Looking ahead, there is a growing concern that the highest savings rates could continue to diminish. At present, only a few banks are offering savings rates of 5% or more, including BOQ, Westpac, MOVE, and ING. However, with predictions that the RBA might cut the cash rate again next month, experts believe that even the highest rates will likely fall into the low 4% range.
In addition to rate cuts on savings accounts, some banks have also been reducing rates on term deposits. Earlier this week, NAB lowered its term deposit rates by 0.5% to 0.20% across various terms. ANZ also reduced its 8-month Advance Notice term deposit rate by 0.10% last week. These adjustments indicate a broader trend in the financial sector, signaling that savers may face even more reductions in the near future.
The Broader Economic Context
The ongoing interest rate cuts come against the backdrop of rising unemployment, with Australia’s unemployment rate climbing to 4.3% in June, up from 4.1% in May. While employment increased slightly by 2,000 people during the month, the number of officially unemployed Australians rose sharply by 33,600. Commonwealth Bank economist Belinda Allen stated that the data supports the case for an August rate cut, suggesting that further cuts to both savings rates and the cash rate could be imminent.
With many banks already reducing rates, the future for savers appears uncertain. If the RBA follows through with further cuts, savers may find themselves earning even less on their deposits, putting additional pressure on Australians who are already struggling with rising living costs.
