Two pieces of news were the focus of cash rate markets this week. The first was Westpac’s mid-week move to raise residential mortgage rates by 0.2%. The second was the looming El Nino weather pattern that would appear likely to deliver drought to Australia this summer. Both were seen as reducing economic growth, convincing some analysts that the RBA was highly likely to cut rates, possibly twice, with several even suggesting 3 November as the date of the first cut. There was even some speculation that the other major banks will follow suit with a mortgage rate hike and that paved the way for the RBA to cut cash rates without fuelling an over-heated housing market.
Cash rate futures are now pricing in a 40% chance of a November rate fall, a nearly 70% chance by Christmas and with a cut by February seen as a certainty. Further, a second cut is being priced by markets as a 65% chances by May.
There was one change to our cash accounts table last week. BankWest’s Smarter eSaver’s rate was reduced by 20bps to 2.80%. While it is not the highest rate in the accounts Yield Report surveys, it is still above the average rate of 2.43% on offer.
|Product||Int p.a.||Special Cond|
|AMP Saver Account||2.60%||31 days notice|
|AMP Notice Account||2.70%|
|ANZ V2 Plus||0.50%||1 dep no w/draw mth|
|ANZ Progress Saver||2.71%||Min balance $5,000|
|Arab Bank Online Savings||2.30%||Up to $500k.|
|Bankwest Smarter Esaver||2.80%||Zero w/draw pm up to $500k|
|BoQ Cash Man Account||2.25%||Limit 1 w/draw pm|
|BoQ Bonus Interest Savings||2.15%||$250k+|
|CBA NetBank Saver||1.85%||$200pm dep, $100k lim, 1wd pm|
|CBA Goal Saver Ac||2.80%|
|CUA eSaver Plus Account||2.90%|
|Heritage Online Saver||2.70%||$750,000+|
|ING Savings Accelerator||2.75%||$150k+|
|ME Online Savings||2.25%|
|NAB Reward Saver||3.05%||1 dep no w/draw mth|
|Rams Saver Account||3.60%||$200 pm no withdrawal|
|Usaver||2.31%||$200 pm up to $200k|
|Usaver Ultra||3.37%||Up to $200k +$2k pm dep|
|Westpac Reward Saver||2.50%||dep $50 and no withdrawals|