In a significant move for savers, Westpac has taken the lead among Australia's major banks by announcing that it will fully pass on the recent cash rate increase from the Reserve Bank of Australia (RBA) to its savings account customers. This announcement was made public on Thursday and is set to take effect on February 13, just four days prior to the bank adjusting its rates for mortgage holders.
Specifically, Westpac Life accounts, which are accessible to all adults, will see an increase of 0.25 percentage points, bringing the maximum ongoing rate to an impressive 4.50 percent. For younger Australians aged 18 to 34, Westpac Life offers an even more attractive rate of 5.25 percent. However, there is an important condition attached: customers must meet certain minimum monthly criteria to secure these higher rates; otherwise, they will only earn a mere 0.10 percent on their balances.
Sally Tindall, Director of Insights at Canstar, expressed her approval, stating, "It's fantastic to see Westpac stepping up for savers. They are paving the way for the younger demographic by maintaining a competitive rate of 5.25 percent for those aged 18 to 34." She emphasized the necessity for these young savers to pay close attention to the fine print if they wish to benefit from this favorable rate each month, as the base rate options start significantly lower at just 0.10 percent.
Westpac isn’t alone in its commitment to passing on interest rate hikes to savers. Macquarie, Australia’s fifth-largest bank, also swiftly confirmed that it would adjust rates accordingly. Effective February 20, Macquarie customers will receive an ongoing variable rate of 4.50 percent per year on balances up to $2 million.
Furthermore, ING has also enhanced the savings rates for most of its offerings, including the well-known ING Savings Maximiser, which will provide a generous rate of 5 percent starting from February 10, contingent upon meeting the required minimum conditions. Meanwhile, Up Bank announced a boost in its savings rates to 4.85 percent effective from February 11, and both UBank and AMP will offer savers a rate of 4.60 percent beginning February 10.
Although only Westpac has officially declared changes to savings rates, it’s noteworthy that all four of the major banks have also reported interest rate hikes. The Commonwealth Bank, the largest residential property lender in the country, was the first to indicate that it would pass on the increased rates to customers, effective February 13. Following that, Westpac revealed that it would elevate its home loan variable rates by 0.25 percent, taking effect on February 17. ANZ later announced a similar increase of 0.25 percent, effective from February 13, and shortly thereafter, NAB disclosed that its standard variable home loan interest rate would also rise by 0.25 percent starting February 13. Additionally, Macquarie Bank confirmed that it too would implement an interest rate hike for home loan customers starting February 20.
This sequence of announcements came after the RBA decided to raise interest rates by 25 basis points during its first meeting of 2026, establishing the official cash rate at 3.85 percent, reverting to levels seen in July 2025. The decision was made unanimously, with the RBA indicating that further increases could be on the horizon.
