Westpac is the latest major bank to tackle interest rates on savings accounts, as lenders try to protect their profit margins from the pressure of ultra-low interest rates.
The bank on Friday cut savings rates by 0.1 to 0.5 percentage points on three products, lowering introductory interest rates or bonuses paid.
RateCity said this was the third time the bank had cut savings rates since November last year, when the Reserve Bank last cut official interest rates to a record low of 0. , 1%.
“Westpac has bowed to the pressure of the low rate environment, reducing savings rates despite no movement towards the cash rate,” said RateCity research director Sally Tindall.
The changes mean that the bank’s eSaver product now has a maximum interest rate of just 0.3 percent – although 0.25 percentage point of that comes from an “introductory” rate that is not paid. only for the first five months.
After this period, the account pays interest of 0.05 percent.
The other rates that were reduced on Friday were “bonus” rates, which are only paid if customers meet certain conditions such as depositing a minimum amount each month.
A Westpac spokeswoman said the bank had taken “different stakeholder needs” into account in making the change. “We are operating in a historically low interest rate environment and there is continued pressure on our savings and deposit rates,” she said.
Westpac shares were down 0.4% to $ 25.90 in the early afternoon.