Banks respond to unchanged cash rate with reductions across savings and mortgages
Several major banks, including NAB and ANZ, have reduced interest rates on term deposits and fixed home loans, despite the Reserve Bank of Australia (RBA) maintaining the cash rate at 3.85 percent last week.
NAB lowered its term deposit rates on Monday, with reductions ranging from five to 20 basis points across various terms. The bank’s 7-month term deposit rate fell by 20 basis points to 3.80 percent. ANZ also decreased its 8-month Advance Notice term deposit by 10 basis points, bringing its top rate to 3.80 percent.
Other institutions, such as Bank Australia, Judo Bank, and People’s Choice, have also adjusted rates downward. Fixed home loan rates have followed a similar trend, with a few lenders cutting rates since Wednesday, such as QBank lowering its fixes by 20 to 30 basis points. SWS Bank, Coastline Bank, and The Capricornian have made comparable changes.
Mozo personal finance expert Rachel Wastell (pictured) noted that 17 banks have cut term deposit rates since the RBA’s decision. “When 17 banks, both big and small, slash term deposits within a week it’s not a coincidence, it’s a signal,” she said.
“Even after the RBA held, the market kept on cutting these forward-looking products, which shows that lenders are most likely preparing for more rate cuts and that the easing cycle is well and truly underway.”
She said that both fixed rates and term deposits are influenced by expectations for future cash rate movements. “If banks thought rates were staying put, we wouldn’t be seeing term deposits and fixed-rate home loans falling,” she said.
“The fact that both big and small lenders are trimming fixed rates across home loans and deposits, even after the RBA paused last week, suggests they’re confident further cash rate cuts are coming and want to get ahead of the curve.”
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