The consumer watchdog has been asked to look into interest rates for savers amid concern banks aren’t offering their customers a fair deal.
Treasurer Jim Chalmers urged the Australian Competition and Consumer Commission to investigate the matter, noting savers should be seeing higher interest rates by now.
“Banks should treat their customers fairly when it comes to savings accounts,” Dr Chalmers said on Wednesday.
“People who rely on their savings bore the brunt of very low rates in the past and they should see the benefits of higher rates now – it should be the silver lining in all of this.”
An ACCC spokesperson welcomed the probe, noting lenders were passing on the Reserve Bank’s interest rate hikes to mortgage customers but increases on deposit products were often lower, slower or conditional.
“This inquiry will provide transparency on these issues,” the spokesperson told AAP.
But RateCity research director Sally Tindall said customers did not need to wait for the outcomes of the inquiry to find a better deal.
She welcomed the inquiry but said competition was still alive and well among banks.
“What we are seeing as the result of rate hikes is the gap between the highest savings account and the lowest is widening so people need to be proactive until those banks decide to lift rates across the board,” Ms Tindall told AAP.
Common strategies employed by banks to avoid passing on the full interest rate increase include hiking some deposit accounts but not others, as well as offering promotional or conditional rates to customers.
She said the banks were offering high rates with strings attached, such as depositing a certain amount into the account each month, to encourage savers to treat them as their primary bank.
Higher rates for younger savers is another tactic used by banks to attract customers that are saving up for a holiday or a house deposit, and will likely be looking for credit products down the line.
“There is a lot of competition in the saving sector but some banks are taking some of their customers for a ride,” Ms Tindall said.
She urged customers to avoid complacency and shop around, with 17 banks now offering ongoing savings rates of four per cent and over.
The RBA started hiking interest rates in May last year to combat fast-rising inflation.
The central bank has lifted the cash rate by a cumulative 300 basis points from record lows of 0.1 per cent, with further hikes expected in 2023.
Poppy Johnston
(Australian Associated Press)
