The Australian Competition and Consumer Commission (ACCC) is to investigate how banks set interest rates for savers, including differences in interest rate rises between bank deposits and home loans.
Chair of the ACCC, Gina Cass-Gottlieb welcomed the Government direction to “shine a light” on the retail deposit market and rate-setting decisions of banks.
Ms Cass-Gottlieb said Australian households together held more than $1.3 trillion in savings and deposit accounts.
“As the cash rate target set by the Reserve Bank of Australia has increased from 0.1 per cent to 3.35 per cent, in most cases banks have fully passed through the cash rate target increases to their home loan interest rates,” Ms Cass-Gottlieb said.
“However, the increases in interest rates on deposit products appear to have typically been smaller and less consistent,” she said.
“In many cases, banks have only applied increases in the cash rate to some of their deposit products, often with conditions attached.”
Ms Cass-Gottlieb said the ACCC would also examine the extent to which consumers could benefit from shopping around and switching, and what other barriers were stopping consumers from seeking a better return on their savings.
She said in undertaking the inquiry, the ACCC would consult closely with financial regulators, including the Reserve Bank of Australia, the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.
Ms Cass-Gottlieb the ACCC would release an issues paper in the coming months, and was directed to report to the Treasurer by 1 December 2023.
