MyState Bank has completed a review of its current interest rates following the Reserve Bank of Australia’s (RBA) November meeting (Tuesday 1 November), where it lifted the official cash interest rate by 0.25%, taking it from 2.60% to 2.85%.
The RBA rise is good news for holders of MyState’s flagship, award-winning Bonus Saver account, who will receive the full RBA’s 0.25% increase. Customers who hold a Special eSaver account will also receive an increase of 0.25%. These will rates will become effective Tuesday 15 November 2022. It is the sixth consecutive month MyState Bank has passed on at least the RBA’s increase in-full to Bonus Saver customers.
This 0.25% increase to the bonus rate will be applied on Bonus Saver accounts for new and existing customers, taking the maximum monthly interest paid to 3.85%* (once eligibility requirements have been met).
MyState Bank Managing Director and CEO Brett Morgan said when making any decision on interest rates, the bank takes into account wholesale funding costs, balancing the needs of both our lending customers and our deposit customers, economic factors and the competitive landscape.
“Today we are announcing an increase of 25 basis points on our multi-award winning Bonus Saver account, which is good news for customers,” said Mr Morgan.
“It’s the sixth time we’ve passed on in-full the RBA’s cash rate increase. Beyond the competitive rates we’re offering, Bonus Saver accounts also give our customers personalised insights, which helps them keep track of their spending and identify places to save.”
“We know the current environment is challenging for both our mortgage customers and savers. The decision to increase interest rates for depositors recognises the higher cost of living faced by our customers.”
Mr Morgan said they’ve also had great feedback from existing and new customers over the past few months, who’ve taken advantage of MyState Bank’s competitive saving and term deposit rates.
“If there’s a silver lining to the RBA’s actions, savers are now being given some of the best rates in several years, and the growing competition and ease of opening accounts means that customers can take advantage of those rates.”
For MyState Bank home loan customers, variable home loan interest rates will increase by 25 basis points (0.25%), effective Tuesday 15 November 2022.
“This is an incredibly difficult decision, and we recognise that household budgets are already under increased pressure. However, the decision is reflective of the ongoing increases in cost of funds.”
“While some customers are ahead on their mortgages, we know seven interest rate increases in a row can be challenging for borrowers,” said Mr Morgan.
As a responsible lender, MyState Bank strictly assess customers’ repayment capacity, and include a serviceability buffer above current interest rates.
“For any customers concerned about their ability to meet upcoming loan repayments, we strongly encourage they get in contact with us as early as possible, as there are ways we can help out.”
“It’s why our customer conversations since May have been around preparing for the possibility of further rate changes, and factoring that into household budgets. Our customers are looking for suggestions on preparing for the months ahead. It could be a case of making small changes to how they’re spending.”
Recent MyState Bank data – drawn from the analysis of aggregate spending patterns of our customers during July – September 2022, compared to the same quarter in 2021 – shows changes in spending habits.
For example, spending on utilities (power, gas, and water) is up. Overall it’s 30% higher, and there are more transactions being made by the same number of customers.
“The impacts of inflation and cost of living increases seem to be at play here. This change in customer behaviour could indicate switching of providers, chasing better deals, or using multiple providers for different services in attempt to get the best price,” said Mr Morgan.
“Another interesting one is the customer spend on pay TV. More of our customers are watching it, but on average they’re spending around 8% less. This is potentially indicative of our customers rationalising the number of streaming services they’d built up over lockdown.”
MyState Bank will always advise customers when interest rates change and let them know directly what their new minimum monthly repayments will be.
“We’ve got some handy tools and money saving articles on our MyState Bank website. For example our home loan repayment calculator, can help with monthly budgeting,” said Mr Morgan.
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