Summary: Cash rate expectations for 2023 higher; cash rate now expected to average 3.87% in May 2024; 3-month BBSW up 7bps; three increases to surveyed ADI cash rates.
Expectations moved this week in a manner which suggested the path of the cash rate will be higher through 2023 and most of 2024 in comparison with its expected path at the end of the previous week. Contracts at the end of the week implied the cash rate would rise from the current rate of 3.82% to average 3.925% in June, move up to an average of 4.045% in July and then average 4.135% in August. February 2024 contracts implied a cash rate of 4.015%, 20bps above the current cash rate, while May 2024 contracts implied 3.87%, up from 3.805% a week ago.
April dwelling approval numbers were released on Tuesday. Total approvals decreased by 8.1% over the month and were 24.1% lower over the past year. Approvals for houses and apartments both fell.
April’s private credit report was published the next day. Total loans outstanding increased by 0.6% over the month, double the expected rate. The annual growth rate slowed from 6.8% to 6.6%.
The March quarter report on construction work done also came out. It produced a 1.8% increase, greater than the 0.7% increase which had been generally expected.
The latest capital expenditure report was released on Thursday. Capex rose by 2.4% in the March quarter and by 6.3% over the year.
April home loan approval numbers were released at the end of the week. They indicated total approvals excluding refinancing decreased by 2.9% over the month and by 25.8% over the twelve months to April.
3-month BBSW is a useful benchmark for cash rates and it finished the week 7bps higher at 4.02%. The RBA’s target for the overnight lending rate between banks is 3.85% but actual overnight interbank loans are being negotiated at 3.82%, 3bps below the target but 7bps above the RBA’s exchange settlement account (ESA) rate for ADI deposits with it.
There were three changes made by deposit-taking institutions in our survey of cash account interest rates this week. Rates on ubank’s Save account, Heritage’s Online Saver account and Up’s Saver account were raised by 15bps, 20bps and 25bps respectively. The average rate paid by ADIs in the survey increased from 3.12% to 3.15%.
CASH ACCOUNTS
| Product | Interest Rate p.a. | Notes |
|---|---|---|
| AMP Saver Account | 4.80% | Min. monthly $1,000 dep. Limit $250,000. |
| ANZ Premium | 0.05% | $10,000 - $499,999 |
| ANZ Progress Saver | 4.00% | Make at least one deposit of $10 or more in a month, make no withdrawals (including transfers), or incur any fees, charges in the month. |
| Arab Bank Online Savings | 1.00% | On balances of $250,000 to $499,999 |
| Bankwest Smart eSaver | 2.00% | On balances up to $500,000.99 with no withdrawals in that month |
| BOQ Fast Track Saver | 2.50% | $1000 minimum monthly deposit. On balances up to $250,000, over part the Base Rate of 0.05% p.a. applies |
| BoQ Bonus Interest Savings | 2.50% | Bonus interest is paid into your account when you limit your withdrawals to a maximum of one per month |
| CBA NetBank Saver | 1.95% | 2.40% p.a. fixed bonus margin for the first 5 months on your first NetBank Saver |
| CBA Goal Saver Account | 4.40% | At least 1 deposit required; balance at end of month must exceed balance at start of month. |
| Great Southern Bank | 4.00% | No bonus conditions |
| Heritage Online Saver | 3.25% | $1 or more, bonus intro rate 1.45% (promotional 4 month rate on new accounts up to $100,000) |
| ING Savings Accelerator | 4.00% | $150,000 and over |
| Macquarie CMA | 2.50% | Minimum $5,000 |
| ME Online Savings | 4.00% | Have both Online Savings Account and Everyday Transaction Account. On balances up to $250,000. Make at least four "tap & go" purchases per month. |
| NAB iSaver | 1.85% | Bonus rate 2.65% for the first four months when you open your first NAB iSaver account |
| NAB Reward Saver | 4.50% | make at least one deposit on or before the second last banking day of the month and no withdrawals during the month |
| Rabobank PremiumSaver | 4.60% | On balances to $250,000. Balance increased by $200 a month. |
| RAMS Saver Account | 1.40% | On balances to $500,000. Minimum $200 deposit each month with no withdrawals. |
| Suncorp Growth Saver | 4.60% | Minimum $200 deposit each month and no more than 1 withdrawal |
| ubank Save Account | 4.75% | On a combined balance of up to $250,000. Minimum $200 deposit each month into Spend or Save accounts. |
| Up Savers Account | 4.10% | Make 5 successful purchases using your Up or 2Up debit card or digital wallets in a month. |
| Westpac eSaver | 1.10% | 4.25% p.a. for the first 5 months for new Westpac eSaver customers |
| Westpac Reward Saver | 4.50% | Make a deposit to the account and ensure account balance is higher at the end of the month than the beginning. Keep your account balance above $0 at all times. |