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Date Published : Thursday, April 03, 2008
While the recent interest rate hikes have been bad news for much of the Australian financial industry, consumers who have savings accounts are currently reaping the benefits, according to a new report.
Earlier this month, the Reserve Bank of Australia decided to hold interest rates at 7.25 per cent - their highest level for 12 years - after two successive rises.
While many of the major banks and financial institutions were quick to increase the rates charged on variable rate home loans, initially the Reserve Bank's decisions were not passed on to savers.
However, according to the Sydney Morning Herald, many of the largest banks in the country have now raised interest rates on savings accounts, as they look to secure cash deposits.
Paul Vivian, BankWest's head of mortgages and savings, told the publication: "These things tend to come in cycles and it's not unusual that every few years we get back to the situation where banks are keener on shoring up retail deposits, as opposed to lending.
"We're in one of these cycles now, clearly."
As a result, a number of banks are offering customers a savings account which gives eight, or even nine per cent interest rates - significantly above the 7.25 per cent set by the Reserve Bank.
While some savings accounts may seem, to some consumers, to be too good to be true, Phillip Gray, spokesman for fund researcher Morningstar, said that rates will decrease soon so banks will not offer them for long.
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