Australian Banks Tighten Savings Account Interest Rules

Major lenders have increased rates following RBA hikes, but many savers fail to meet strict conditions for the higher returns.

Updated on Oct. 31, 2026 in Saving

Isometric editorial illustration of a heavy brass vault handle on a stone wall, representing strict banking account conditions. — Major Australian banks have raised interest rates, though many depositors remain excluded from higher returns due to strict monthly account requirements. AI Illustration. Upload story photo >

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Do you trust that your bank is helping you earn the best possible interest on savings?

As of September 2026, major Australian banks have raised savings interest rates by 0.20 or 0.25 percent. However, most depositors are not receiving these gains due to strict monthly account requirements.

Why it matters

Banks impose these conditions to manage account activity, yet a vast portion of customer funds remain in low-interest accounts. This often stems from consumer inertia, with relatively few Australians switching their financial products annually.

Major banks currently apply a base interest rate of only 0.10 percent for savers who fail to meet monthly deposit or withdrawal targets. Despite banks paying out over $120 billion in interest last year, hundreds of billions remain in non-interest bearing accounts.

The players

Commonwealth Bank

This is one of the major financial institutions in Australia and the largest holder of non-interest bearing deposits among the big four banks.

Reserve Bank

This institution is the central bank of Australia and is responsible for setting the official cash rate that influences commercial bank interest.

Westpac

As a major Australian bank, it manages significant retail deposits and adjusts savings rates based on broader monetary policy.

NAB

National Australia Bank is a primary financial services provider that recently adjusted its savings product interest rates.

ANZ

The Australia and New Zealand Banking Group is one of the four major lenders responsible for the current retail deposit interest structures.

The details

The Commonwealth Bank, NAB, ANZ, and Westpac collectively hold hundreds of billions in accounts that earn no interest. Customers must adhere to specific contribution and withdrawal conditions to access the higher rates, a threshold that 70 percent of users currently fail to reach.

2023: The ACCC conducted a retail deposits inquiry regarding bank products.
March 2026: Westpac, NAB, and ANZ held significant non-interest bearing funds.
June 2026: The Commonwealth Bank held $122 billion in zero-interest accounts.
September 2026: Major banks increased savings rates following an RBA move.
November 2026: The Reserve Bank is expected to meet to decide on a potential interest rate hike.

Market Dynamics

The current interest rate environment follows the precedent established during the ACCC retail deposits inquiry. This story highlights a persistent gap where most retail depositors fail to meet the requirements necessary to capture the rate hikes set by the Reserve Bank.

Savers must review the specific withdrawal and deposit conditions on their accounts to avoid reverting to the 0.10 percent base rate. Since only 16 percent of consumers switched savings accounts in the last three years, many depositors may be missing out on higher yields.

The takeaway

Many Australians keep their money in stagnant accounts despite recent rate hikes across major banks. Checking your specific account requirements today can ensure you are not left earning the minimal base interest rate.

What happens next

The Reserve Bank is scheduled to meet in November 2026 to determine if a further interest rate hike is necessary, with markets currently pricing in a 98 percent chance of an increase.