Shortly after the Reserve Bank of Australia raised the official cash rate by a quarter of a percentage point, major lenders announced higher mortgage rates. However, increases to savings account interest rates remain pending or selective, sparking criticism from consumer advocates.
Canstar's data insights director, Sally Tindall, described the delay as a game of “wait and see,” with banks monitoring customer reactions and competitor moves before adjusting savings rates. “It shouldn’t be a lengthy consideration,” Tindall said, arguing that if mortgage rates are passed on in full, savings rates should follow suit.
The reluctance to automatically boost savings rates stems from banks' desire to protect their balance sheets. Yet they must compete for deposits to fund operations, including mortgages. Complex bonus-interest products often trap customers, with the consumer regulator finding about two-thirds of bonus account holders miss the advertised headline rate.
Westpac and Commonwealth Bank have announced selective increases, with Westpac offering a 5.25% rate for customers aged 18–34, subject to conditions. NAB noted that savings rate changes may vary by product due to funding costs and market conditions. Tindall urged customers to “take your nest egg shopping” to find better deals, as competition remains muted amid record household cash holdings.
