Bank customers across the country are being called on by the Australian Competition and Consumer Commission (ACCC) to share their views on how banks set their interest rates on savings accounts and home loans.
Calling for submissions on the ACCC Retail Deposits Inquiry issues paper, Chair of the ACCC, Gina Cass-Gottlieb said the inquiry would examine how banks and other authorised deposit-taking institutions set their rates on retail deposit products and how their approaches differ for credit products, such as home loans.
“Over the past 12 months, the Reserve Bank of Australia has increased the cash rate target from 0.35 per cent in May 2022 to 3.60 per cent in March 2023 in response to high and rising inflation,” Ms Cass-Gottlieb said.
“While banks have generally increased variable rate home loans interest rates in line with the cash rate increases, increases to the savings interest rates that banks pay their customers have often been smaller or conditional,” she said.
“The ACCC will be considering how banks have adjusted their rates for deposit accounts following these changes to the cash rate target, including the use of introductory and other conditional interest rate offers.”
Ms Cass-Gottlieb said the ACCC was eager to hear about competition and consumer issues affecting the supply of retail deposit products to Australian consumers and self-managed super funds.
She said the inquiry would closely examine how banks make decisions on interest rates, and any barriers consumers face in getting a better deal.
“The Inquiry will also examine how interest rates of similar products vary between consumers depending on the amounts deposited, whether they are new or existing customers, whether they hold other products with the same bank or if they belong to a particular demographic,” the ACCC Chair said.
“We also want to hear from consumers and consumer organisations about experiences in searching for and taking up retail deposit products, including any impediments consumers face in switching banks to get a better deal.”
Ms Cass-Gottlieb said the inquiry would also be considering how banks and other financial institutions compete with each other, and the potential for entry by new competitors.
The ACCC’s 25-page issues paper, open for submissions until 19 May, can be accessed at this PS News link.
