The Best Value Interest Rates for Borrowers and Savers in October

The Reserve Bank of Australia (RBA) kept the national cash rate on hold at 4.10 per cent at its October 2023 meeting, but it’s not yet certain if interest rates have reached their final peak. While the RBA may choose to maintain the hold for the rest of the year, it could also decide that another hike is necessary to tackle the risk of rising inflation.

With the cost of living biting a chunk out of our wallets (paid a power bill or filled up your car lately? Ouch), it’s important to be mindful of your personal finances. Comparing the available options and considering alternatives could potentially help you better manage your household budget.

Here are some of the top borrowing and saving options from RateCity in October 2023:

Some of the lowest home loan options

Even with the cash rate staying on hold in recent months, Australian homeowners are still doing it tough, thanks to the dozen previous rate rises since April 2022 putting pressure on household budgets.

That said, RateCity research has found that the average Australian owner-occupier has pocketed a 0.63 percentage point rate reduction by either haggling or refinancing their loan. Investors may have done even better, with an average reduction of 0.67 percentage points.

If you’re yet to organise a discounted interest rate for your own home loan, here are some of the lowest-rate mortgage options available on the RateCity database at the time of writing, which you could consider refinancing with:

Some of the lowest owner-occupier variable options

• RACQ Bank Fixed Rate Home Loan – Owner Occupied (QLD only): 5.34% Fixed – 5 years (Comparison Rate 6.11%)
• Arab Bank Australia Basic Low Rate Home Loan Offer: 5.45% Variable (Comparison Rate 5.58%)
• Australian Mutual Bank Fixed Rate Home Loan: 5.48% Fixed – 3 years (Comparison Rate 6.10%)
• Macquarie Credit Union Fixed Rate Home Loan: 5.48% Fixed – 1 year (Comparison Rate 7.90%)
• First Option Bank Simple Home Loan (Variable): 5.49% Variable (Comparison Rate 5.48%)

Source: RateCity.com.au. Data accurate as of 13/10/2023

Some of the lowest investor variable rates

• South West Slopes Credit Union Optimum Fixed Rate Investment Loan: 5.49% Fixed – 3 years (Comparison Rate 6.32%)
• RACQ Bank Fixed Rate Home Loan – Investor (QLD only): 5.54% Fixed – 5 years (Comparison Rate 6.48%)
• Macquarie Credit Union Fixed Rate Home Loan: 5.56% Fixed – 1 years (Comparison Rate 8.08%)
• Australian Mutual Bank Fixed Rate Home Loan: 5.58% Fixed – 3 years (Comparison Rate 6.48%)
• Northern Inland Credit Union Dream Value Home Loan: 5.59% Variable (Comparison Rate 5.74%)

Source: RateCity.com.au. Data accurate as of 13/10/2023

Some of the highest savings account and term deposit interest rates

If the RBA’s rate hikes do help to lower inflation in Australia, this could be positive news for savers. Australians putting their money into savings accounts with interest rates higher than inflation may be able to make some real progress towards their savings goals, as their money should retain its purchasing power and avoid going backwards.

Some of the highest savings account interest rates

• 5.65% – ME Bank HomeME
• 5.50% – Hiver Target Saver
• 5.50% – Teachers Mutual Bank Target Saver
• 5.50% – ING Savings Maximiser
• 5.50% – UniBank Target Saver

Source: RateCity.com.au. Data accurate as of 13/10/2023

You could also try to grow your wealth through investing in assets such as shares or crypto. While these investments can have high returns, past performance isn’t a reliable indicator of future performance, so there’s a real risk that you could end up at a loss if markets don’t behave how you expect.

Depending on your financial situation, you may prefer to lock away your money in a term deposit, with a fixed interest rate and pre-set term. This lets you calculate the return on your deposit in advance, and know exactly how much progress you can make towards your savings goal. Plus, as term deposits (and savings accounts) are guaranteed by the Federal Government under the Financial Claims Scheme, your money should be safe even if the bank were to go out of business.

Some of the highest term deposit interest rates

• 5.25% for 12 month – Bank of Sydney Term Deposit
• 5.25% for 24 months – G&C Mutual Bank Term Deposit (2 years)
• 5.20% for 24 months – Greater Bank Term Deposit
• 5.20% for 24 months – Newcastle Permanent Term Deposit
• 5.20% for 12 months – Qudos Bank Term Deposit

Source: RateCity.com.au. Data accurate as of 13/10/2023