The Australian Competition and Consumer Commission (ACCC) on Wednesday announced it will investigate how the banks have passed on interest rate hikes for savers.
It will probe the differences between home loan and deposit interest rate setting, with the final report set to be delivered by 1 December.
ACCC chair Gina Cass-Gottlieb (pictured) said this comes after the Federal Government directed the regulator to commence an inquiry as the RBA started hiking the cash rate in May 2022.
Early findings indicate the rate increases on deposits have been smaller than they have for home loans, with extra conditions attached.
"We welcome this direction from the Government to shine a light on the retail deposit market and rate-setting decisions of banks” ACCC Chair Gina Cass-Gottlieb said.
"We are aware that deposit and savings accounts are an important source of income for many Australians, typically supplementing their income from employment, superannuation and the pension.”
In May 2022, RBA data indicates the average online savings account rate was 0.25% p.a.
The average variable-rate new owner occupier home loan was 2.61% p.a. - a margin of 236 basis points.
Compare that to December 2022, and the rates are 1.05% p.a. and 4.98% p.a. respectively - a margin of 393 basis points, meaning the gulf has widened by 157 basis points.
This has been a continuing theme during the rate tightening period.
However, the margins between the same home loan type and 'bonus' savings accounts are actually narrowing.
A 'bonus' savings account is classified as one where savers need to make a minimum deposit and make no withdrawals in a month.
This is also a point of contention for the ACCC - it's assessing why interest rates are increasing on the bonus portion, forcing savers to jump through a variety of hoops.
For example, most of the top-five savings accounts in the market in terms of interest rate have minimum deposits of at least $1,000 per month that need to be met to attain the full rate.
"We will also examine the extent to which consumers can benefit from shopping around and switching, and what other barriers are stopping consumers from seeking a better return on their savings,” Ms Cass-Gottlieb said.
The news comes as CommBank half-year results show a $5.15 billion profit, aided by an increase in the Net Interest Margin (NIM) by 23 basis points to 2.10% compared to the previous period.
