RBA Cash Rate 2024: Current Interest Rates Australia

Q: What is the cash rate & how does it work?

The cash rate is an interest rate set by a central bank, determining the rate of interest paid on overnight loans between banks. Generally, banks borrow and process transfers between each other overnight which are the funds lended to meet their daily cash needs. The cash rate also serves as a benchmark rate for everything from mortgages and savings accounts to the exchange rate, making it an important tool for managing national monetary policy.

Q: How does the RBA determine the cash rate?

The RBA Board meets eight times per year to make a decision on whether to alter the cash rate or keep it steady. In doing so, the RBA considers a number of key economic factors including inflation, employment, the economic growth rate of the Australian economy and global financial conditions. Inflation Based on quarterly readings of the Consumer Price Index (CPI), inflation refers to the percentage increase in the price of household goods from one point in time to another. The RBA has a flexible annual inflation goal of 2-3%, meaning that while inflation is allowed to fall outside this range, it should remain within 2% and 3% on average. Employment Employment and unemployment levels provide an indication as to how well an economy is performing. If the unemployment rate is rising, the RBA might choose to lower interest rates to stimulate spending and investment, which may then lead to the creation of new jobs. Economic growth Economic growth in Australia is typically measured as a percentage change in the nation’s total value of goods and services or Gross Domestic Product (GDP). If economic growth has slowed or is on the way down, the RBA may lower the cash rate to bring demand for goods and services back up. This works by reducing the incentive to save and increasing the incentive to borrow and spend. Global financial conditions Global financial conditions also feature in determining the cash rate. Strong economic growth overseas can mean increased demand for Australian products. On the other hand, if overseas conditions are weak or if tensions exist among major trade partners, the flow-on effect could hit Australia’s economy.

Q: Who controls interest rates in Australia?

In Australia, the RBA controls the cash rate. Financial institutions are free to set their own interest rates, but they generally follow the cash rate’s movements.

Q: What happens when the cash rate is lowered?

If the RBA lowers the cash rate, banks are also likely to follow suit, reducing their loan rates and rates for savings accounts and term deposits. This means it may be easier to obtain a loan, with mortgage rates becoming more favourable for buyers. However, lower cash rates may also mean that you receive significantly lower returns on your savings, as interest payments decline in value.

Q: What happens when the cash rate is raised?

If the RBA increases the cash rate, borrowing generally becomes more expensive, but savers may be able to earn more interest on their savings accounts and term deposits.

Q: How does the cash rate impact interest rates?

Where the cash rate flows through to other interest rates is often referred to as ‘interest rate pass-through’. While the RBA’s monthly cash rate announcements are important and do partly influence how banks and lenders set their interest rates, they are not the only factor that goes into the decision. Other factors such as conditions in financial markets, changes in competition, and risks associated with different types of loans also influence interest rates. As a result, the degree of interest rate pass-through can vary over time.

Q: How does the cash rate impact home loans?

The cash rate can have a big influence over home loan interest rates , although banks and lenders are under no obligation to follow the decisions of the RBA. However, for most lending institutions, the cash rate forms a central part in determining their own interest rates. When the cash rate is low, lenders may be expected to offer lower interest rates to new and first home-buyers and refinancers in the housing market. A rise in the cash rate, however, could likewise mean home loan rates going up, as banks and lenders pass on the cost of the rise.

Q: How does the cash rate impact savings accounts and term deposits?

Generally, savings accounts and term deposits can move in line with the cash rate. This means that if the cash rate goes up, banks may raise the interest rates on deposits, which encourages people to deposit their money in savings to earn interest. If the cash rate falls, interest rates on deposits tend to go down with it. This is all too familiar for Australian savings accounts, with interest rates continuing to remain at record lows.

Current RBA cash rate: 4.35%

The cash rate is Australia's official interest rate which is currently held at a target of 4.35% by the Reserve Bank of Australia (RBA).

The cash rate is determined by the Reserve Bank of Australia in a board meeting eight times per year. This rate is the rate charged on loans between financial institutions (like banks), and it has a significant impact on the price of financial products.

In Australia, a high RBA cash rate has historically resulted in high interest rates on home loans, car loans, personal loans, savings accounts, term deposits and so on. Likewise, a low cash rate results in low interest rates on these products, which is good for borrowers but not for savers.

As things stand, Australia's current cash rate is 4.35%. The infographic below displays the recent history of Australia's cash rate.

Current home loan interest rates

Home loan rates are closely tied to the cash rate - the lower the cash rate, the lower home loan rates will go as lenders fight and scrape to offer the most competitive rates on the market.

Getting a low home loan interest rate is extremely important. Homes cost hundreds of thousands of dollars, which is likely to be the biggest expense of your life by far. Even a cheap home loan will still rack up interest costs of over a hundred thousand dollars over the life of the loan, so it's imperative you don't just pick the first home loan you see.

Other home loan products:

The infographic above displays how average home loan interest rates have changed since July 2019.

Compare Home Loans

Home Loan Interest Rates

If you don't want to get stuck with a high-rate home loan, check out a collection of some of the lowest-rate home loans on the market in our table below.

Loan purpose

Loan amount

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Lender	Home Loan	Interest Rate	Comparison Rate*	Monthly Repayment	Repayment type	Rate Type	Ongoing Fees	Upfront Fees	Max LVR	Tags	Features	Link	Compare	Promoted Product	Disclosure
loans.com.au	loans.com.au Variable Home Loan (LVR < 90%)	6.04% p.a.	6.08% p.a.	$3,011	Principal & Interest	Variable	$0	$530	90%	4.6 Star Customer Ratings	Available for purchase or refinance, min 10% deposit needed to qualify. No application, ongoing monthly or annual fees. Quick and easy online application process.	More details	Compare	Promoted	Disclosure
Unloan	Unloan Variable Rate Home Loan LVR < 80%	5.99% p.a.	5.90% p.a.	$2,995	Principal & Interest	Variable	$0	$0	80%	Apply in minutes	No application or ongoing fees. Annual rate discount Unlimited redraws & additional repayments. LVR <80% A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.	More details	Compare	Promoted	Disclosure
ubank, part of NAB	ubank, part of NAB Neat home loan - max. 60% LVR (Owner occupied, Principal and interest)	6.09% p.a.	6.11% p.a.	$3,027	Principal & Interest	Variable	$0	$250	60%		No annual fees – None! Get fast pre-approval Unlimited additional repayments free of charge	More details	Compare	Promoted	Disclosure

Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

Current savings account interest rates

Savings accounts are typically separate to your everyday bank account, aka a transaction account. When you open a bank account you should have both - the transaction account to make payments with, and the savings account to earn interest.

The interest rate on your savings account can help you earn a little bit extra on the money you've earned. Say you deposit $10,000 worth of savings in an account that pays 2.00% p.a: after one year you'd have earned a little bit more than $200 (thanks to the magic of compound interest).

Types of savings accounts:

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Savings Account Interest Rates

To find a good savings account interest rate, check out our table below that shows some of the highest interest rates available.

Time period

Deposit amount

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Bank	Savings Account	Base Interest Rate	Max Interest Rate	Total Interest Earned	Introductory Term	Minimum Amount	Maximum Amount	Minimum Monthly Deposit	Minimum Opening Deposit	Account Keeping Fee	Features	Link	Compare	Promoted Product	Disclosure
Macquarie Bank	Macquarie Bank Savings Account	5.00% p.a.	5.35% p.a. Intro rate for 4 months then 5.00% p.a.	$1,036	4 months	$0	$249,999	$0	$0	$0	A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking No withdrawal notice periods or interest rate penalties Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace	More details	Compare	Promoted	Disclosure
ING	ING Savings Accelerator	4.70% p.a.	5.40% p.a. Intro rate for 4 months then 4.70% p.a.	$998	4 months	$250,000	$99,999,999	$0	$0	–	Special offer: Savings Accelerator (Kick Starter offer). For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply. If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%	More details	Compare	Promoted	Disclosure
ubank, part of NAB	ubank, part of NAB Save Account	0.00% p.a. Bonus rate of 5.50% Rate varies on savings amount.	5.50% p.a.	$1,128	–	$0	$99,999	$0	$0	$0	Set up your Pay Cycle and connect your accounts from over 140 financial institutions. Retrace your spending steps into categories with Spending Footprint. No monthly or international fees on any of your transactions.	More details	Compare	Promoted	Disclosure
AMP	AMP Saver Account	1.00% p.a. Bonus rate of 4.20% Rate varies on savings amount.	5.20% p.a.	$1,065	–	$0	$99,999,999	$1,000	$0	$0	Earn up to 5.20% pa by depositing $1,000 in the previous month No account fees Easy access to your money	More details	Compare
ING	ING Savings Maximiser	0.55% p.a. Bonus rate of 4.95% Rate varies on savings amount.	5.50% p.a.	$1,128	–	$0	$99,999	$1,000	$0	$0	Deposit at least $1,000+ each month from an external source Make 5 or more eligible transactions. Grow your savings balance each month	More details	Compare		Disclosure

Save Account

Product Features

Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
Retrace your spending steps into categories with Spending Footprint.
No monthly or international fees on any of your transactions.

Total interest earned $1,128

0.00% Base interest rate

Bonus rate of

5.50%

Rate varies on savings amount.

5.50% Max interest rate

More details

Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

Current term deposit interest rates

Term deposits are a similar beast to savings accounts except the money is typically locked away for the duration of the term, whereas funds in a savings account should be able to be withdrawn at any time. Also, the interest rate on a term deposit is fixed for the whole term (like a fixed-rate home loan), while a savings account's interest rate could be raised or cut several times a year (like a variable-rate home loan).

Term deposits are offering similar interest rates to savings accounts at the moment as they too are closely linked to the cash rate.

The average rates for different term deposit terms can be seen in the infographic below, with longer terms generally attracting higher interest rates.

Different deposit terms:

Compare Term Deposits

Term Deposit Interest Rates

There are term deposit rates on the market higher than these averages though, and you should endeavor to find one. The table below displays some of the highest term deposit rates available for a six-month term.

Deposit term

Deposit amount

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Bank	Term Deposit	Interest Rate	Interest Frequency	Term	Minimum Deposit	Maximum Deposit	Notice Period to Withdraw	Account Keeping Fee	Features	Link	Compare
Heartland Bank	Heartland Bank Term Deposit - 6 months	5.09% p.a.	At Maturity	6 months	$25,000	$1,000,000	–	–		More details	Compare
Judo Bank	Judo Bank Personal Term Deposits - 6 months	5.05% p.a.	At Maturity	6 months	$1,000	$1,000,000	–	–	Competitive interest rates on all term lengths Deposits covered up to $250,000 under Government's Finance Claims Scheme Loyalty bonus at renewal	More details	Compare
Gateway Bank	Gateway Bank Term Deposits - 6 months	5.05% p.a.	At Maturity	6 months	$1,000	$0	–	–		More details	Compare
G&C Mutual Bank	G&C Mutual Bank Fixed Term Deposit - 6 months	4.95% p.a.	At Maturity	6 months	$1,000	$1,000,000	–	–		More details	Compare
ME	ME Bank Term Deposit - 6 months	4.90% p.a.	At Maturity	6 months	$5,000	$1,000,000	–	–		More details	Compare
MOVE Bank	MOVE Bank Term Deposit - 6 months	4.80% p.a.	At Maturity	6 months	$5,000	$19,999	–	–		More details	Compare

Important Information and Comparison Rate Warning

Why do interest rates change?

Banks and lenders adjust interest rates on loans and savings accounts for a variety of factors, but a lot of it comes down to the institution's costs of funding loans.

There are wider markets from which banks and lenders source the funds that allow them to provide a loan, including bond markets and overnight loans between banks, which are influenced by various economic and market forces. When the costs of sourcing these funds goes up (e.g. bond rates rise), the lenders often pass these costs on to customers by raising the interest rates on the loans they provide.

Central banks - such as Australia’s RBA - have a big influence on this cost of funding by setting a cash rate, which is essentially the rate on the overnight loans between banks. The RBA sets this cash rate based on whether it thinks the economy needs stimulating (e.g. cuts interest rates to encourage spending and boost economic growth and employment) or needs slowing down (e.g. hikes interest rates to curb high inflation).

RBA & Cash Rate Frequently Asked Questions

What is the cash rate & how does it work?

The cash rate is an interest rate set by a central bank, determining the rate of interest paid on overnight loans between banks. Generally, banks borrow and process transfers between each other overnight which are the funds lended to meet their daily cash needs.

The cash rate also serves as a benchmark rate for everything from mortgages and savings accounts to the exchange rate, making it an important tool for managing national monetary policy.

How does the RBA determine the cash rate?

The RBA Board meets eight times per year to make a decision on whether to alter the cash rate or keep it steady. In doing so, the RBA considers a number of key economic factors including inflation, employment, the economic growth rate of the Australian economy and global financial conditions.

Inflation

Based on quarterly readings of the Consumer Price Index (CPI), inflation refers to the percentage increase in the price of household goods from one point in time to another. The RBA has a flexible annual inflation goal of 2-3%, meaning that while inflation is allowed to fall outside this range, it should remain within 2% and 3% on average.

Employment

Employment and unemployment levels provide an indication as to how well an economy is performing. If the unemployment rate is rising, the RBA might choose to lower interest rates to stimulate spending and investment, which may then lead to the creation of new jobs.

Economic growth

Economic growth in Australia is typically measured as a percentage change in the nation’s total value of goods and services or Gross Domestic Product (GDP). If economic growth has slowed or is on the way down, the RBA may lower the cash rate to bring demand for goods and services back up. This works by reducing the incentive to save and increasing the incentive to borrow and spend.

Global financial conditions

Global financial conditions also feature in determining the cash rate. Strong economic growth overseas can mean increased demand for Australian products. On the other hand, if overseas conditions are weak or if tensions exist among major trade partners, the flow-on effect could hit Australia’s economy.

Who controls interest rates in Australia?

In Australia, the RBA controls the cash rate. Financial institutions are free to set their own interest rates, but they generally follow the cash rate’s movements.

What happens when the cash rate is lowered?

If the RBA lowers the cash rate, banks are also likely to follow suit, reducing their loan rates and rates for savings accounts and term deposits. This means it may be easier to obtain a loan, with mortgage rates becoming more favourable for buyers. However, lower cash rates may also mean that you receive significantly lower returns on your savings, as interest payments decline in value.

What happens when the cash rate is raised?

If the RBA increases the cash rate, borrowing generally becomes more expensive, but savers may be able to earn more interest on their savings accounts and term deposits.

How does the cash rate impact interest rates?

Where the cash rate flows through to other interest rates is often referred to as ‘interest rate pass-through’. While the RBA’s monthly cash rate announcements are important and do partly influence how banks and lenders set their interest rates, they are not the only factor that goes into the decision. Other factors such as conditions in financial markets, changes in competition, and risks associated with different types of loans also influence interest rates. As a result, the degree of interest rate pass-through can vary over time.

How does the cash rate impact home loans?

The cash rate can have a big influence over home loan interest rates, although banks and lenders are under no obligation to follow the decisions of the RBA. However, for most lending institutions, the cash rate forms a central part in determining their own interest rates. When the cash rate is low, lenders may be expected to offer lower interest rates to new and first home-buyers and refinancers in the housing market. A rise in the cash rate, however, could likewise mean home loan rates going up, as banks and lenders pass on the cost of the rise.

How does the cash rate impact savings accounts and term deposits?

Generally, savings accounts and term deposits can move in line with the cash rate. This means that if the cash rate goes up, banks may raise the interest rates on deposits, which encourages people to deposit their money in savings to earn interest.

If the cash rate falls, interest rates on deposits tend to go down with it. This is all too familiar for Australian savings accounts, with interest rates continuing to remain at record lows.

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the InfoChoice Group. In the interests of full disclosure, the InfoChoice Group are associated with the Firstmac Group. Read about how InfoChoice Group manages potential conflicts of interest, along how we get paid.

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Comparison Rate Warning and Base Criteria

For home loans, the base criteria include a $500,000 loan amount over 30 years. For car loans, the base criteria include a $30,000 loan over 5 years. For personal loans, the base criteria include a $20,000 loan over 5 years. These rates are only examples and may not include all fees and charges.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Monthly Repayment Figures

Monthly repayment figures are estimates that exclude fees. These estimates are based on the advertised rates for the specified term and loan amount. Actual repayments will depend on your circumstances and interest rate changes.

Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you.

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Current interest rates Australia

Current RBA cash rate: 4.35%

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