August 2016


At the start of the month the RBA reduced the official rate to 1.50% as many economists had expected. While inflation, or lack of it, is viewed as the driver behind the decision, some analysts are suggesting the ‘high’ currency was equally important in the RBA’s thinking. The August SoMP added little except it confirmed the market’s view the RBA has an easing bias and another cut down to 1.25% is not an unrealistic expectation.

While consumers were slightly more optimistic, comments accompanying the NAB Business survey  caused a stir, firstly by its prediction of a slowdown in the Australian economy and secondly by re-iterating a forecast first made by an ANZ economist of the prospect of “non-conventional” monetary policies in Australia.

The RBA minutes were a non-event and at best it was hoped some indication as to the closeness of the decision to cut would be given. Under-employment had been raised as an issue at July’s RBA meeting; July Labour Force figures seemed to confirm this as all the growth was via part time jobs, while full time employment fell.

The prevailing view among economists is the RBA is done for 2017 and it will wait until 2017 to act again. Pricing in cash markets suggests otherwise and November is a 44% chance for another 25bps cut and by August 2017 a 1.25% rate is viewed as a certainty.

Aug 16 Cash rate exec


ProductInt p.a.Special Cond
AMP Saver Account2.10%31 days’ notice
AMP Notice Account2.20%
ANZ Premium1.50%
ANZ Progress Saver2.01%Min balance $5,000
Arab Bank Online Savings1.90% Up to $500k.
Bankwest Smarter Esaver2.20%Zero w/draw pm up to $500k
BoQ Cash Man Account1.55%Limit 1 w/draw pm
BoQ Bonus Interest Savings230%$250k+
CBA NetBank Saver1.25%$200pm dep, $100k lim, 1wd pm
CBA Goal Saver Ac1.95%
CUA eSaver Plus Account2.75%
Heritage Online Saver2.25%$750,000+
ING Savings Accelerator1.90%$150k+
Macquarie CMA1.40%
ME Online Savings1.30%
NAB iSaver1.30%
NAB Reward Saver2.95%1 dep no w/draw mth
Rams Saver Account3.15%$200 pm no withdrawal
Suncorp eOptions1.60%
USaver1.81%$200 pm up to $200k
USaver Ultra2.87%Up to $200k +$2k pm dep
Westpac eSaver1.25%
Westpac Reward Saver1.85%dep $50 and no withdrawals