01 Aug – 05 Aug 2016

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The RBA cut the official cash rate to a historic low of 1.50% and this led to two changes to yields offered in our cash accounts table. Both ING’s Savings Accelerator Account and Macquarie’s Cash Management Account reduced rates by 25bps. The account offering the highest rate in the YieldReport survey is the RAMS Saver Account but after the RBA’s rate change, it is likely that it won’t be long before RAMS and most other institutions lower their rates.

cash-rate-5aug

The RBA decision dominated a week in which there was an awful lot of data and central bank decisions both here and offshore. As expected the RBA cut rates by 0.25% and while economists said the bank would do so on the basis of inflation being well below 2.00%-3.00% target range, some analysts are suggesting the ‘high’ currency was as much a driver. In central bank land though, one can’t be seen to be targeting the exchange rate directly lest you draw the ire of US bureaucrats [see Hypocrite of the Year award]. That the exchange rate finished higher over the week of the rate cut demonstrates that central bank rate cuts are seen as “pushing on a string” in terms of their effectiveness.

Monday’s release of the Melbourne Institute’s Inflation Gauge July reading was overshadowed by the pending rate decision and retail sales on Thursday was viewed as disappointing, although excluding food the number was quite robust. Friday’s quarterly Statement on Monetary Policy, coming so soon after the rate cut did not add much except to confirm the market’s view the RBA has an easing bias.

cash-rate-rba-5aug

CASH ACCOUNTS

ProductInt p.a.Special Cond
AMP Saver Account2.35%31 days’ notice
AMP Notice Account2.45%
ANZ Premium1.75%
ANZ Progress Saver2.26%Min balance $5,000
Arab Bank Online Savings2.05% Up to $500k.
Bankwest Smarter Esaver2.45%Zero w/draw pm up to $500k
BoQ Cash Man Account1.80%Limit 1 w/draw pm
BoQ Bonus Interest Savings2.55%$250k+
CBA NetBank Saver1.50%$200pm dep, $100k lim, 1wd pm
CBA Goal Saver Ac2.20%
CUA eSaver Plus Account2.85%
Heritage Online Saver2.45%$750,000+
ING Savings Accelerator1.90%$150k+
Macquarie CMA1.40%
ME Online Savings1.55%
NAB iSaver1.55%
NAB Reward Saver2.95%1 dep no w/draw mth
Rams Saver Account3.15%$200 pm no withdrawal
Suncorp eOptions1.60%
USaver2.06%$200 pm up to $200k
USaver Ultra3.12%Up to $200k +$2k pm dep
Westpac eSaver1.50%
Westpac Reward Saver2.10%dep $50 and no withdrawals