ANZ's major savings move on 'no strings attached' interest rate: 'Double-edged sword'

ANZ has adjusted the interest rate rules on one of its savings accounts, which could see some customers lose money. The bank has increased the interest rate on its Plus Save account by 0.1 per cent from 4.90 to 5 per cent, but you need to deposit at least $100 every month to qualify.

If you aren't able to meet that new obligation then the interest rate drops dramatically from a maximum of 5 per cent to 0.5 per cent. Canstar data insights director Sally Tindall said the increased interest rate would be great for those who qualify but disastrous for those who don't.

"Anyone that doesn’t meet the new monthly terms and conditions will see their interest rate plummet," she said.

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“ANZ Plus launched this ‘no strings attached’ account back in early 2022, attracting savers who were tired of jumping through hoops to qualify for the maximum rate.

"This change today will have ruffled at least a few feathers among its current customer base.

“If your bank has changed your interest rate structure recently, use this as a nudge to check you’ve got the right savings account for your finances and your savings habits. You might find you’re better off under the new structure, but it's worth checking this rather than just assuming."

RateCity's money editor Laine Gordon called it "a double-edged sword for savers".

Previously, the only condition for the Plus Save system was that accounts with more than $250,000 would only get an interest rate of 3.75 per cent.

Many Aussies aren't getting their bonus interest

The consumer watchdog found late last year that many Aussies miss out if they have funds in accounts that offer bonus interest if they meet certain conditions.

In the first six months of 2023, an average of 71 per cent of bonus interest accounts weren't able to receive their bonus interest.

The Australian Competition and Consumer Competition highlighted how one bank's bonus interest system could have allowed a customer with $5,000 in the account, who deposits $200 per month, to earn $328 in interest over a 12-month period. That dropped to just $18 if they didn't meet the obligations.

Tindall said it was worth ensuring you knew all the rules if you wanted to squeeze the most out of your money.

“Bonus saving rate schemes are a game you need to play with a close eye on the rules. For keen savers who can meet any regular conditions with their eyes shut, this type of account might be up their alley," she explained.

“However, if you’re a haphazard saver or someone who hates staying on top of the rules, it could well be worth putting your savings into a different field altogether.

“What’s important is to work out which type of account will fit with your savings habits, then spend time looking for one offering a competitive rate.”

ANZ joins Westpac in changing rates

ANZ's move on its Plus Save account follows a similar decision from Westpac last week.

The other Big Four bank lowered the base rate of its Life account by 0.15 per cent to 1.85 per cent, while hiking the bonus rate by the same 0.15 per cent to 3.15 per cent. The maximum rate will remain at 5 per cent.

Mozo personal finance expert Rachel Wastell told Yahoo Finance that changes to savings rates typically occur when the Reserve Bank of Australia gets close to cutting interest rates.

“Once the RBA cuts, there will likely be a number of banks cutting savings rates in response, so banks with less competitive rates may hold off on cuts until that first RBA cut comes through,” she said.

“Aussies with their savings in a leading online savings account should be checking their rate to see if it's moved, especially as we could see more rate leaders shifting rates down as we get closer to an RBA cut.

“Bonus rates can be attractive if you meet the conditions needed to secure the high interest rate, but with changes happening to the base rates on savings accounts - the rate your savings account will revert to if you don’t meet those conditions - savers need to be vigilant."

Highest savings rates for Aussies

Below are the bank accounts that have the highest interest rates that don't require any work from you:

1. The Mutual Bank Internet Saver: 6.00 per cent but the balance cap up to $100,000

2. Australian Unity Freedom Saver: 5.20 per cent with a $50,000 balance cap

3. ANZ Flex Saver: 5.00 per cent with a $5,000 balance cap

4. Bank of Queensland Simple Saver: 4.85 per cent with a $5 million balance cap

5. Macquarie Savings account: 4.75 per cent on balances up to $1 million

Here are the ones that have a few strings attached:

1. ME HomeME Savings Account: 5.5 per cent when you deposit $2,000 and grow balance

2. MOVE Bank Growth Saver: 5.5 per cent when you deposit $200 and make no withdrawals

3. ING Savings Maximiser: 5.5 per cent when you deposit $1,000, grow your balance and make 5 card purchases with linked account

4. Ubank High Interest Save Account: 5.5 per cent when you deposit $500

5. Rabobank Premium Saver: 5.45 per cent when you grow balance by $200 a month

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