Trending News 7 June

ANZ reacts to criticism on interest rates

ANZ Bank’s chief executive Shayne Elliott said his bank’s controversial decision not to pass on the full June RBA rate cut to customers was about balancing the needs of depositors and shareholders with loan customers.

The timing of ANZ Bank’s cuts to its term deposit rates last week was “unfortunate” said Mr Elliott who has spoken at length this week about protecting depositors from the impact of rate cuts.

ANZ Bank has since announced a rate rise for 11-month term deposits and has not changed rates on at-call savings and transaction accounts.

ANZ has been strongly criticised by the treasurer Josh Frydenberg and the RBA Governor this week but Mr Elliott is standing firm.

“They have jobs to do, and I have mine,” Mr Elliott told the Australian Financial Review.

“We have an obligation to be profitable.”

Rate cut does NOT mean lower home loan repayments

Your home loan repayments will NOT be coming down following the Reserve Bank’s cut to official rates this week, even if your bank has quickly passed on the rate cut in full to you.

The chances are that your bank will continue to take the same repayment amount from your bank account unless you actively take action to tell them to reduce your repayments.

If you don’t take action, and just sit back and do nothing, your repayments will remain the same, even though your minimum required repayment amount has come down. So you will be paying more than the minimum required amount, meaning you are effectively paying down your loan faster.

More banks announce rate cuts for borrowers

Rate cuts are flowing through the mortgage market this week, following the Reserve Bank’s 0.25 percentage point cut in the official cash rate on Tuesday 4 June.

Commonwealth and National Australia Bank have already announced they will be passing on the rate cut in full to their variable rate home loan customers. Westpac has cut caraibale rates by 0.20 percentage points and ANZ by 0.18.

Yesterday, Bank of Queensland (BOQ) announced reductions to its standard variable home loan interest rates by 0.25 percentage points per annum. BoQ’s Clear Path Owner Occupier P&I rate will be cut by 0.15 percentage points..

“We are pleased to pass on the RBA’s rate cut in full to the majority of our customers,” said BoQ executive Lyn McGrath.

BoQ owned Virgin Money announced rate cuts of 0.22 percentage points for owner occupiers and investors.

CUA is reducing standard, discount and fresh start variable home loan rates by 0.25 percentage points.

Bank Australia announced a 0.25 percentage point rate reduction for all its owner occupier and investor loan customers.

Macquarie Bank and ING also announced 0.25 percentage point rate cuts for variable rate home loan customers.

Compare the top home loan products from Australia’s banks, credit unions, building societies and non-bank lenders here.

Australians in the dark about bank fees

Most Australians are not aware of the account, card, loan and transaction fees and charges they are being charged by their bank.

More than three quarters of Aussies (76 per cent) do not know how much they pay in bank fees according to new research from UBank.

Aussies pay an average of $468 per year in bank fees according to the Reserve Bank, but they think they pay much less, about $328 on average, according to UBank.

Only 20 per cent of Aussies can accurately recall the fees they pay on their home loan. Just 23 per cent know about the fees they pay on their credit card and only 18 per cent know what fees they pay on their car and personal loans.

“We encourage Australians to take control and seek out fee-free products and accounts,” said Lee Hatton, chief executive of UBank.

What is a green term deposit?

UBank has developed and launched an innovative new product into the term deposit market called a “Green Term Deposit.” Funds deposited into a UBank Green Term Deposit are matched to a portfolio of renewable energy projects including wind, solar and low carbon transport and buildings and are certified by the Climate Bonds Initiative.

UBank chief executive Lee Hatton said the UBank Green Term Deposit is the first product of its kind in the world.

“We are hoping to dispel the myth that sustainable products provide a less than desirable financial outcome.”

All Green term Deposits with terms over 6 months are currently offering an interest rate of 2.45 per cent p.a.

Compare term deposit rates, fees and features from Australia’s major banks, credit unions and other financial institutions here.

UBank is an InfoChoice sponsored listing partner.