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As more Australians save, banks are cutting interest rates for deposits faster than the RBA's offical cash rate
As more Australians save, banks are cutting interest rates for deposits faster than the RBA's offical cash rate

The Guardian

time3 days ago

  • Business
  • The Guardian

As more Australians save, banks are cutting interest rates for deposits faster than the RBA's offical cash rate

Leading banks are racing to cut interest rates offered to savers, despite the Reserve Bank leaving the official cash rate on hold this month, as households flood banks with deposits. ANZ on Friday cut the full rate on its progress saver account from 3.5% per year to 3.4% despite the RBA leaving its target rate unchanged a week earlier in a shock move. Westpac dropped its reward saver rate by 0.05% in June, taking the bank's total cuts to the rate to 0.65% since February. The RBA has only cut its target rate by 0.5% over that period. Both banks have also cut rates on their alternative savings products over the year, in line with the Reserve Bank. Ubank has slashed its rate by a much greater 0.9% over 2025. On Tuesday, Ubank cut its savings rate to just 4.6%, while adding a temporary bonus for new customers and a higher threshold on account balances. Bendigo Bank dropped its EasySaver rate by 0.1% in July, according to Canstar tracking. Major lenders have cut the rates offered to savers faster than the RBA has cut its own key interest rate since the start of 2024 – narrowing returns paid to customers and boosting bank profits. Rates have fallen further for standard or online accounts, which have no conditions, though conditional bonus account rates are also sliding as banks cut their losses. Only four banks are now offering widely accessible accounts with interest rates of 5% or more, Canstar's database shows. The slide is a sign banks are taking advantage of Australians' high demand for savings accounts instead of competing for deposits, according to Sally Tindall, the data insights director at Canstar. 'Money in the bank is at a record high, so banks aren't having to compete for people's deposits,' she said. 'Australians are absolutely focused on putting their funds away for a rainy day [so] the banks are flush with cash.' Guardian Australia has previously asked major banks about their decisions to trim unconditional savings rates, pushing customers towards conditional rates, before cutting the conditional rates as well. A Westpac spokesperson in June said interest rates were affected by market pressures. Sign up to Afternoon Update Our Australian afternoon update breaks down the key stories of the day, telling you what's happening and why it matters after newsletter promotion 'In making interest rate decisions, we consider a range of factors including the cost of funds and the broader market environment, balancing the needs of both borrowers and savers,' the spokesperson said. Lenders have enjoyed increased freedom to cut rewards for savers as the volume of savings rises, with workers setting aside a rising proportion of their incomes as cost-of-living pressures ease. National data released in May showed the proportion of household income saved rather than spent had risen to its highest level since 2022. The rising share of income dedicated to saving has seen households' deposits in banks soar to a record $1.62tn in 2025, rising by $24bn over the five months to May, data from the banking regulator shows. The Reserve Bank is expected to cut interest rates in August despite surprising markets in July, with economists predicting the cash rate will fall 0.25%. That would see further cuts to interest rates, which would benefit mortgage holders but likely wipe out the handful of savings accounts still offering a 5% annual return, according to Tindall. 'Cash rate cuts are a double-edged sword and we so often see banks [pass] that cut on to savers faster than they do to their mortgage rate customers,' she said.

Major bank 'sneaks' in rate cut for savers despite RBA hold: 'Frustrating'
Major bank 'sneaks' in rate cut for savers despite RBA hold: 'Frustrating'

Yahoo

time5 days ago

  • Business
  • Yahoo

Major bank 'sneaks' in rate cut for savers despite RBA hold: 'Frustrating'

ANZ has cut the interest rate on its popular savings account despite the Reserve Bank of Australia (RBA) opting to hold the cash rate steady last week. The Big Four joins other banks like NAB and Bendigo Bank in quietly cutting savings rates over the last month. ANZ today cut the maximum rate of its Progress Saver by 0.10 per cent to 3.40 per cent. The bank previously passed on RBA's May interest rate cut in full to savings customers, lowering rates on its key accounts one week after the cut. NAB cut the rate of its Reward Saver account by 0.05 per cent on June 20, bringing the total rate to 4.35 per cent. Bendigo Bank cut the rate on its EasySaver account by 0.10 per cent on July 1 to 3.05 per cent. RELATED Major banks reveal updated RBA interest rate cut predictions after 'surprise' hold Coles and Costco grocery price comparison 'shocks' Aussie mum Top 10 superannuation funds revealed as Aussies receive 'double-digit' returns Canstar data insights director Sally Tindall said ANZ was the latest bank to 'sneak in' a savings interest rate cut, following two earlier cash rate cuts 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,' she said. 'Two of the big four banks have sliced select savings rates in the past month, despite no move to the cash rate. 'While cuts of 0.05 and 0.10 percentage points may seem trivial on paper, for customers doing all the right things to meet monthly conditions, it's yet another frustrating backwards step.'Just four banks offer at least one savings rate of 5 per cent or more: BOQ, Westpac, MOVE and ING. But if the RBA cuts the cash rate as anticipated next month, Tindall said the highest ongoing rates would 'almost certainly sink into the '4's''. It comes after NAB cut its term deposit rates earlier this week, with cuts of between 0.5 and 0.20 per cent across multiple terms. ANZ also trimmed its 8-month Advance Notice term deposit by 0.10 per cent last week. Jump in unemployment rate sets scene for August RBA cut The unemployment rate rose 4.3 per cent in June, this week's ABS data revealed, up from 4.1 per cent in May. Employment increased by 2,000 people during the month, but the number of officially unemployed people jumped by 33,600. Commonwealth Bank economist Belinda Allen said the data helped support the case for an August rate cut. 'One hurdle has now been removed for an August rate cut and suggests even with a much higher than expected trimmed CPI print the RBA should deliver a 25 basis point cut,' she said. Westpac economist Ryan Well said the data strengthened the 'already-strong case to deliver the next rate cut in August'. AMP chief economist Shane Oliver said the data leaves the RBA "on track to cut rates in August". "With unemployment breaking to its highest since the pandemic, and June jobs data showing broad-based weakness, it's now hard to describe the labour market as tight. It also supports the view that the RBA should have cut this month," he said. Betashares chief economist David Bassanese, who correctly predicted a hold in July, said the unemployment data was a 'slam dunk' for an August rate cut. When do the major banks expect RBA interest rate cuts? The major banks all expect the RBA will cut interest rates at the August meeting. They are then split on how many more interest rate cuts will follow. Here are their current forecasts: CBA: Two more cuts in August and November to bring cash rate to 3.35 per cent Westpac: Four more cuts in August, November, February and May to bring cash rate to 2.85 per cent NAB: Three more cuts in August, November and February to bring cash rate to 3.10 per cent ANZ: Two more cuts in August and November to bring cash rate to 3.35 per centError in retrieving data Sign in to access your portfolio Error in retrieving data

'Keep our bank open': Small Tasmanian community fights to overturn looming closure of Queenstown Bendigo Bank
'Keep our bank open': Small Tasmanian community fights to overturn looming closure of Queenstown Bendigo Bank

Sky News AU

time14-07-2025

  • Business
  • Sky News AU

'Keep our bank open': Small Tasmanian community fights to overturn looming closure of Queenstown Bendigo Bank

A Tasmanian community has launched a bid to save its last banking branch on the West Coast ahead of the looming closure of Bendigo Bank's Queenstown site. Bendigo Bank, which operates Australia's second biggest regional branch network, recently confirmed the closure of 10 branches across parts of Tasmania, Victoria and Queensland. In Tasmania, the West Coast Queenstown branch till shut from September 26, while the Kings Meadow site in Launceston will close on August 1. A petition has since begun in a bid to keep the doors open at the Queenstown site, which is the last standing branch of any Aussie bank in the historic mining town. Local resident Janet Lay, who is spearheading the online petition, told the branch is a "vital essential service" for the West Coast community. Ms Lay fears the closure of the Queenstown site will force locals to travel lengthy distances for another physical branch, or resort to online banking. "I do not do online banking - I refuse to," Ms Lay said. For Ms Lay, in-person banking offers an experience online services cannot as speaking to a teller makes her "feel more in control" of her finances. "You're actually dealing with a person and not just a machine," Ms Lay said. "You can get real-time information. They (bank staffers) can assist you with any questions that you have." The 48-year-old has concerns about how the branch closure will impact older members of the Queenstown and broader West Coast community who prefer to bank in person, like her mother. "For my elderly mother, she will be extremely adversely impacted by this," Ms Lay said. Ms Lay said her mum has always banked person-to-person, and has never used an ATM. "There is no way she will ever do online banking because she just doesn't understand it and trust it, as many of our elderly in our community, and myself, don't trust online banking," she said. Ms Lay said online scams are also a concern while completing financial tasks online. The next closest Bendigo Bank branch to Queenstown is located on the coastal town of Burnie, which is about a two-hour drive north. Ms Lay claimed the travel would impose an "extra cost" for individuals, community groups or local businesses hoping to do in person banking. The closure of the Queenstown bank will also mean the removal of its ATM, leaving only one machine left in town, which Ms Lay said can often be unreliable. "Our local community markets around the West Coast rely on people going in with cash, so they would be adversely impacted," she said, speaking of the branch and ATM closures. While acknowledging nearby Australia Post offices offer banking services like cash withdrawals or deposits, Ms Lay believes it cannot replace the services offered by a bank or its tellers. The petition, created on July 9, had amassed 270 signatures at the time of publishing. "The ultimate goal is to change the Bendigo Bank's decision and to keep our bank open," Ms Lay said. "Even if they reduce (hours) down to one day a week, or if they open one weekday and a Saturday once a fortnight. "Even to be open on a Saturday would let people that work five days a week and can't get in there during the week to be able to go into the bank and use it." Bendigo Bank confirmed the branch has been operating on reduced hours since the beginning of July, opening on Tuesdays and Thursdays from 10.00am to 1.00pm, and 1.30pm to 4.00pm. According to online Bendigo Bank figures, the Queenstown branch had 308 personal banking customers who made three or more regular visits in the year from May 2024 to April 2025. About 190 customers made 12 or more visits to the branch for personal banking in the same timeframe. The site had 66 business banking customers who made three or more visits over the last year, or 197 who attended the branch a dozen or more times. In terms of personal banking transactions, the number of cash withdrawals hit a four-year high in 2023 at 150, up from 148 in 2022 and 141 in 2021. However, the rate of personal banking cash withdrawals dropped in 2024 to a total of 95 before falling again to 61 in 2025. A total of 2,222 personal cash deposits were recorded at the Queenstown Bendigo branch in 2021, followed by 2,289 in 2022, and 1,959 in 2023. This rate increased to 2,726 in 2024 - the highest in the four-year period - before dipping to 2,433 in 2025. According to the Bendigo Bank data, there were 2,234 business banking cash deposits in 2021, followed by 2,092 in 2022, 1,757 in 2023, 1,658 in 2024 and 1,219 in 2025. A Bendigo Bank spokesperson said the decision to close the Queenstown branch came after a "review of evolving customer preferences, a reduction in business activity and an increase in costs". "The Bank apologises for any inconvenience. Bendigo Bank is proud of its regional heritage and operates Australia's second largest regional branch network," a spokesperson said. "To preserve our ability to continue delivering for our customers and communities, we must ensure our branches are adequately supported and resourced." Bendigo Bank said a range of banking options remain available to affected customers, confirming there is "no impact to how their accounts operate". "Customers can continue to transact as normal at any Bendigo Bank branch, ATM or at any time via internet banking, our mobile app or by phone on 1300 236 344," the bank said. The bank said the nearest Australia Post Office for Bank@Post services is located at 32 Orr Street, next door to the closing Queenstown branch. "Bendigo Bank maintains more branches per customer than any other Australian Bank," a spokesperson said. "The Bank is committed to its branch network and the personalised interactions that occur in branch every day."

Bendigo Bank customers fight against closure of last bank in town: ‘Kick in the guts'
Bendigo Bank customers fight against closure of last bank in town: ‘Kick in the guts'

Yahoo

time14-07-2025

  • Business
  • Yahoo

Bendigo Bank customers fight against closure of last bank in town: ‘Kick in the guts'

Residents of Tasmania's Queenstown are fighting to keep the last bank branch in town open after Bendigo Bank announced it would shut its doors from September. The impending closure means their nearest bank branch is now a two-hour drive away. Janet Lay told Yahoo Finance she was 'absolutely furious' when she found out about the branch closure. The 47-year-old carer said she had been a customer with the bank for the last 20 years. 'It's not the only bank in town, it's the only bricks and mortar bank on the entire west coast,' Lay said. RELATED Bendigo Bank to shut 10 branches with regional towns left with no bank ATO tax return warning for 2 million Aussies over dangerous act Warning for working from home Aussies over common practice 'For the last 12 months, as the hours have been scaled back, we've continuously been told that, no, the bank's not closing down, the bank will always be here, we'll be here to support you. 'Now, a few months later, it's closing down. So Australia's most trusted bank, in the eyes of the west coast, is certainly not living up to its name.' Lay said she preferred to do her banking in person, including paying her mortgage every month, and predominantly transacted with cash. 'That's my preference. I prefer to have more control over my finances, as do a lot of people, so you can budget your money and you know exactly where every cent is going,' she said. The Queenstown branch is set to close permanently from Friday, September 26. It means residents will be a two-hour drive from their nearest branch in Burnie. Residents can access basic banking services through Australia Post's Bank@Post service, with limits for cash deposits and withdrawals in place. There is only one other ATM in town, an ATMx outside the Railway Supermarket, which charges fees.A Bendigo Bank spokesperson told Yahoo Finance the bank had made the 'difficult decision' to close the branch following 'a review of evolving customer preferences, a reduction in business activity and an increase in costs'. 'The Bank apologises for any inconvenience. Bendigo Bank is proud of its regional heritage and operates Australia's second largest regional branch network,' the spokesperson said. 'To preserve our ability to continue delivering for our customers and communities, we must ensure our branches are adequately supported and resourced.' Branch data showed there had been 61 cash withdrawals made at the branch in 2025, dropping from 141 cash withdrawals in 2021. Meanwhile, 2,433 cash deposits and 107 cheque deposits were made this year. About 308 personal banking customers and 66 business banking customers made three or more regular visits over the last year. The Queenstown closure was one of the 10 branches that Bendigo Bank confirmed would be closing in the coming months across Victoria, Queensland and Tasmania. The federal government struck a deal with the Big Four banks earlier this year to keep their regional banks open until at least mid-2027. An earlier solution floated by the government involved a levy on banks with little or no regional presence. The shift towards digital banking has been a big factor leading to the decline in bank branches, with the Australian Banking Association noting branch interactions had dropped 50 per cent in recent years. About 36 per cent of bank branches in regional Australia have closed since 2017, according to the government. West Coast Council Mayor Shane Pitt told Yahoo Finance the bank's closure would have a 'huge impact', particularly given the community's ageing population. 'A lot of people still like face-to-face banking and also the fact that they are pulling out the ATM as part of this bank closure means Queenstown will be left with just one ATM at the supermarket,' he said. 'Given that we rely on tourism a fair bit on the west coast as well, it's just another kick in the guts for tourism and the west coast.' Pitt said there was 'no consultation at all' with the community about the closure. He noted a Bendigo Bank representative had previously assured them 12 months ago that it would not be closing the bank. The Bendigo Bank previously operated five days a week but reduced hours to three days a week with lunch closures last year. It is now open only on Tuesdays from 10am to 1pm and Thursdays from 1:30pm to 4pm until its scheduled September closure. Pitt said he was fighting to keep the bank branch open. 'We've moved a motion to discuss with Bendigo Bank whether a community bank option is on the table and whether they will keep the bank open until at least June, 2026 when the lease of the building runs out so at least it gives us a chance to look at other options, if there is any,' he said. Lay has started an online petition opposing the bank closure, which has received more than 260 signatures. She said there was 'a lot of frustration in the community' over the closure. '[There's] a lot of upset people, a lot of anxiety about how they're going to manage their banking moving forward,' she said. 'Bendigo Bank in doing this is also sending out a message to people looking to move to the west coast, to businesses looking to open on the west coast, or the mines looking to do further investment, don't bother, the west coast is dead.'

Bendigo Bank to close 10 branches in Queensland, Victoria and Tasmania
Bendigo Bank to close 10 branches in Queensland, Victoria and Tasmania

7NEWS

time08-07-2025

  • Business
  • 7NEWS

Bendigo Bank to close 10 branches in Queensland, Victoria and Tasmania

Bendigo Bank will close 10 branches across three states, with the bank blaming 'evolving customer preferences' for its decision. Regional areas in Victoria, Queensland and Tasmania will be impacted the most, with branches closing from August 1. Locations include Bannockburn and Korumburra in Victoria, Malanda in Queensland and Queenstown in Tasmania. Bendigo Bank said the decision was made following 'a review of evolving customer preferences, a reduction in business activity and an increase in costs'. Closing branches was a last resort, chief executive officer and managing director Richard Fennell said. 'Bendigo Bank has more branches per customer than any other Australian bank. We operate the second-largest regional branch network and the third-largest branch network nationally,' he said. 'To preserve what makes our bank unique, we must balance our physical network presence with the need to continue investing in the changing preferences of our 2.7 million customers.' Bendigo Bank says it's 'exploring opportunities' to redeploy staff working at the affected branches. Finance Sector Union National Secretary Julia Angrisano said the closures were a slap in the face for people in regional communities, especially in areas where there are now no other bank branches. 'Three Victorian communities — Bannockburn, Korumburra Yarram, along with Malanda in Queensland, and Queenstown in Tasmania will lose the last of their local bank branches. Also impacted are regional branches in Kings Meadows (Launceston, Tasmania) and Tully (in Northern Queensland),' Angrisano said. 'This is an incredibly disturbing development and does not bode well for the future of Bendigo Bank's presence in regional Australia. 'For a bank which proudly has its regional centre hometown as part of its name, and is fondly known for its community branch network, this decision feels very 'big bank' for all the wrong reasons.' The Finance Sector Union has written to Fennell as well as local MPs of the impacted regional communities, in a bid to save the branches. 'The Finance Sector Union has also raised the issue of consumer and worker regulation of banking with new Assistant Treasurer and Minister for Financial Services Daniel Mullino MP,' Angrisano said. 'It is critical that the federal government step in and protect bank workers and customers given the banks have proven themselves to be incapable of doing anything other than putting profits and shareholders first.' Bendigo Bank branches closing: Stream free on

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