This is the second time in less than a month that UBank has reduced savings account rates, having cut the ‘USaver’ base rate by 27 basis points on 28 June in response to the Reserve Bank of Australia’s (RBA) June cash rate cut.

In response to the RBA’s July rate cut, the NAB-owned online bank today lowered the base rate on its ‘USaver’ and ‘USaver with Ultra’ accounts from 1.54% p.a. to 1.35% p.a.

The bonus rate on its ‘USaver with Ultra’ account remains the same at 1.06% p.a.

To receive this bonus rate, customers need to hold a linked ‘Ultra’ transaction account and deposit at least $200 (e.g. their salary) into either the transaction or savings account.

Prior to the two recent rate cuts, UBank’s maximum savings account interest rate was 2.87% p.a.

In a statement, a UBank spokesperson said the institution decided not to cut savings and term deposit rates this month by any more than 19 basis points as it tries to balance the needs of all its customers.

“Decisions like these are difficult and reflect the current unique circumstances, with home loan rates at record lows at the same time as deposit and savings rates also being at record lows,” the spokesperson said.

“The costs associated to provide these products is based on a range of factors including borrowing costs and economic pressures.  

“Despite this, our rates remain highly competitive and encourage customers to check our website for more information about our products.”

UBank is also cutting variable home loan rates for its customers by 25 basis points, but these aren’t effective till 2 August – 16 days after today’s savings account rate cuts.

Who else has cut rates?

UBank’s latest savings account rate cuts follow rate reductions from a number of other major institutions earlier this month.

On 9 July, ING Australia slashed the rate on its popular Savings Maximiser account by another 25 basis points, while NAB and ANZ cut this month by 19 and 25 basis points, respectively.

Commonwealth Bank announced in a statement that it would cut its NetBank Saver account interest rate by 15 basis points on July 23rd.

ME and BOQ, which had boasted some of the highest rates on savings accounts, are also among those who have already cut this month.

As it stands now, the following products offer some of the highest interest rates available for savers, but note some of these are likely to have their rates lowered later this month.

Endeavour Mutual is also offering up to 2.75% p.a. on its Lifestyle account, but this is only available for savers aged up to 35.

How much of a difference does 19 basis points make?

On a starting balance of $10,000, with monthly deposits of $1,000, the former rate of 2.60% would have earned UBank customers approximately $400 of interest in one year.

But at the reduced interest rate of 2.41%, those same customers would only see $377 in interest.