Australia’s most powerful financial regulators are closely watching how much of the rise in interest rates banks pass onto household savings accounts. |clancyyeates
Financial regulators will closely watch how much of the rise in interest rates banks pass on to household savings accounts, having so far lifted rates on home loans by far more than on deposits.
The Council of Financial Regulators said there had been “much less pass-through to deposit interest rates than to lending interest rates so far”.The council is made up of the country’s main financial regulators: the Reserve Bank, the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission and the federal Treasury.have passed on this month’s 0.
Importantly, banks have increased term deposit rates more sharply, which should help savers such as retirees. Even so, the lack of movement in at-call savings accounts is a sign of the large deposit balances banks are holding, which means there is less pressure to compete for funds. “They are not having to work very hard on the deposit front at the moment because they amassed these huge deposits back during COVID,” Mickenbecker said.Even so, Mickenbecker said that in previous cycles of interest rate rises, deposit interest rates had ultimately lifted more steeply than rates on loans. He expected banks would need to compete more aggressively to attract deposits in six to 12 months, as wholesale funding costs increased.
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