Banks Cut Interest Rates On Term Deposits
The banks have now decided to slash the interest the owners would pay on savings accounts, with no relief in the mortgage rates.
The big banks have left no chance in deducting saving rates on term deposits account from the past seven days and thus have left savers in the situation where they will have to face drastic reduced returns when their funds mature.
Shane Oliver AMP Capital chief economist informed that the banks were running out of excuses for not cutting interest rates.
She said, “It's funny, earlier this week we heard that one of the reasons banks could not cut mortgage rates was the high returns being paid to savers. Now we are seeing savings rates falling, and the banks still aren't cutting rates. They are running out of excuses.”
At the end of the week the Commonwealth Bank reported almost $4.8 billion in profit and the cuts on the saving-rates will come as a bane for the customers.
On the other hand, Macquarie Bank took another path, carrying its peers over the coals and claimed that banks could easily cut the mortgage rates right now.
The saving rates have been cut up to 0.55% by ANZ and up to 0.40% by Commonwealth Bank. St George and Westpac have also reduced their saving rates by 0.28% and 0.30% respectively.
The borrowers who are already paying almost 20% interest will also face a rise in the rates of credit cards.
On Thursday, Westpac bank added 0.54% to three of its credit cards, which took the rates as high as to 19.45%
During the past two months, many other banks have also raised the rates on its credit cards, although it was absolutely obvious that the next move in the cash rate would be downwards.