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Reserve Bank Interest rate change

Reserve Bank Interest rate change

Update, 19 March 2020

Following a special Board meeting today, the Reserve Bank announced a further 25 basis point cut to the Cash Rate, to move the Official Cash Rate to a new low of just 0.25%. This announcement follows a similar 25 basis point reduction to the Cash Rate on 4 March 2020.

This latest decision sees reductions since June 2019 total 1.25%. As per standard operational practice, WAW will assess this latest decision by the RBA and announce its decision on loan and deposit rates over the coming days.


Following a reduction to the Official Cash Rate announced by the Reserve Bank of Australia (RBA) at their March Board meeting, WAW will make the following changes:
 
  • Residential and commercial variable rate loans will reduce by 0.20% p.a., effective 16 March 2020 for new borrowers and 14 April 2020 for existing borrowers. 
  • Fixed rate loans will reduce by up to 0.60% for new loans, effective 16 March 2020. 
  • Fixed term investment accounts will reduce up to 0.20% across the product range, effective 16 March 2020. 
  • Various reductions of up to 0.25% will be applied to savings account interest rates for new and existing accounts from 1 April 2020.

These updates follow a series of recent announcements by the RBA to bring the Official Cash Rate down to an unprecedented low of 0.50%.
 
Following these changes, WAW’s new Standard Variable Rate of 4.29% will remain well below those of the Major Banks ANZ, CBA, NAB and Westpac, as well as Bendigo Bank.
 
WAW’s decisions in this ultra-low rate environment continue to be based on the organisation’s desire to balance the impact that successive rate cuts have on both depositors and borrowers. The Credit Union remains focused on being able to offer very competitive term investment and savings rates to thousands of depositors, while also ensuring that borrowers have access to savings delivered by reductions to the cash rate.
 
WAW CEO Michael Mack said: “As a customer-owned financial institution, we need to continue to find ways to support both borrowers and investors in such a low rate environment. While these decisions are increasingly difficult after successive rate cuts, we are doing what we can to maintain competitive rates for customers who rely on returns from their savings, while also recognising the expectations of and benefits to our borrowers with record low interest rates on loans”.