Commonwealth Bank and NAB have penalised savers a week after passing on the RBA’s full interest rate cut to borrowers.
Both banks – who passed on June’s full 0.25 per cent RBA cash rate cut – have reduced the base rate on their online savings accounts by 0.20 percentage points, leaving them at 0.30 per cent.
The base rate is the ongoing rate of interest after the promotional introductory bonus expires after three, four, or five months.
NAB also announced on Friday cuts to its term deposit rates of between 0.10 and 0.25 percentage points for various terms, following CBA’s earlier move.
Fellow “big four” players ANZ and Westpac are yet to announce changes to savings account rates but Canstar’s finance expert Steve Mickenbecker said they shouldn’t be too far behind.
“Having held on to part of the home loan cut, (ANZ and Westpac) may be in a position to not cut so deep,” Mr Mickenbecker said.
CBA and NAB said last week they would pass the entire 25 basis point reduction to their mortgage customers but ANZ only reduced its variable mortgage rates by 18 basis points.
Westpac is reducing most variable home loan rates, including those for owner-occupier mortgages, by 20 basis points, although interest-only investors will get a reduction of 35 basis points.
Both ANZ and Westpac were criticised for their decision, with Reserve Bank Governor Philip Lowe breaking from his usual practice and calling for a full pass-through of the cut to mortgage customers.
Meanwhile, Mr Mickenbecker said Friday’s savings rate cut were an inevitable consequence of the June 4 cash rate cut.
“This leaves savings rates at rock bottom levels, and will put the banks under intense pressure if and when the RBA cuts the cash rate again in the next few months,” Mr Mickenbecker said.
“The potential to squeeze profit margins will be keeping bank executives awake at night.”
He said the prospect of negative interest rates, as seen in other global economies, was starting to look more likely.
“Unfortunately for savers and in particular self-funded retirees, the cuts follow a long slide in interest rates that started when the RBA moved down in November 2011,” Mr Mickenbecker said.
The wider financial sector was trading 0.6 per cent lower at 1155 AEST with all four major banks in the red.