Major Australian banks are reducing interest rates on savings accounts more aggressively than the Reserve Bank of Australia (RBA) has cut its official cash rate, as household deposits reach record highs. ANZ, NAB, Ubank, and Bendigo Bank have all trimmed rates on various savings products in recent months, even as the RBA held its target rate steady in July.
ANZ cut the full rate on its Progress Saver account from 3.5% to 3.4% on Friday, while NAB reduced its Reward Saver rate by 0.05% in June, bringing total cuts since February to 0.65%. Over the same period, the RBA has cut its cash rate by only 0.5%. Ubank has slashed its savings rate by 0.9% throughout 2025, dropping to 4.6% in July, and Bendigo Bank cut its EasySaver rate by 0.1%.
According to Canstar data, only four banks now offer widely accessible savings accounts with interest rates of 5% or more. Sally Tindall, Canstar's data insights director, said banks are not competing for deposits because Australians are saving at record levels. 'Money in the bank is at a record high, so banks aren’t having to compete for people’s deposits,' she said.
Household deposits in banks have soared to a record $1.62 trillion in 2025, rising by $24 billion in the five months to May, according to banking regulator data. The savings rate has climbed to its highest since 2022 as cost-of-living pressures ease.
The RBA is expected to cut rates in August, which could further reduce savings rates. Tindall warned that cash rate cuts often benefit mortgage holders but hurt savers, as banks pass cuts on to savers faster than to borrowers.
