Those in the market for a new savings account might miss the group’s once-market leading Target Saver account after it was closed to new customers late last week.
The account was the only high interest savings account offered by Teachers Mutual Bank Limited – one of the largest customer owned banks in the country.
Until recently, the Target Saver account offered an interest rate of 5.50% p.a.
That saw it just 5 basis points off the highest ongoing interest rate offered to Australians right now – 5.55% p.a. from ME Bank’s HomeME account – and on par with the returns offered by ING’s popular Savings Maximiser account.
The Target Saver account’s interest rate was cut to 5.25% p.a. just weeks before it was closed to new business, according to data from InfoChoice.
Those who already hold the account can continue to access the product.
Now, the highest interest rate offered by Teachers Mutual Bank and affiliates comes from the newly relaunched Hiver Saver, which promises a rate half of what savers once enjoyed: a conditional 2.25% p.a.
Though, it wasn’t all bad news, with the bank also removing the conditional bonus on its Mighty Saver Account and the also grandfathered Under 18 Savings Account, offering an unconditional 5.00% p.a. on balances up to $20,000.
“We are committed to offering banking products and services that help our Members achieve their financial goals,” a Teachers Mutual Bank spokesperson told Savings.com.au.
“This means that, like any bank, at times we will offer competitive rates, be it on our savings products or our lending products.”
The bank said it is confident its lineup is still attractive to existing and new customers.
The move to grandfather the Target Saver account came just days after Rabobank dropped rates offered on many of its savings accounts, keeping its market-leading introductory rate intact.
Such moves could indicate that banks expect the Reserve Bank of Australia (RBA) to cut the cash rate in the near future and are preparing for interest rates to fall more broadly.
Changes in deposit products can also reflect a shift in management of funding mixes.
The chart below depicts changes in the household deposits held in Teachers Mutual Bank between 2019 and 2024, as well as its home lending portfolio.
Teachers Mutual Bank slashes term deposit interest rates
Beyond savings accounts, Teachers Mutual Bank has also made changes to its term deposit offerings this week.
The bank slashed rates offered on term deposits by as much as 85 basis points.
Its nine month product now promises a 4.05% p.a. return – down from 4.90% p.a. – while its 12 month product promises a 4.75% p.a. return – down from 5.00% p.a.
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Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.
Image by Steve Johnson on Unsplash
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