Australian financial service providers have considered offering special term deposit rates to their clients. As of March 2020, the administrators of these lenders thought it is best to assist the local households as the coronavirus pandemic continues to affect the people’s wellness and financial situations negatively. Bank clients who are quarantining themselves inside their houses at this point can contemplate on the advantages of the new special term deposit rates. They may find these offerings of the lenders as ways to improve their present dismal moods and conditions and can help them plan for the better days ahead.
Sweeping Impact of Coronavirus Pandemic to Australian Households
The coronavirus or COVID-19 pandemic has swept the world harshly. Since the spread of the fatal ailment broke out in Wuhan, China in December 2019 up to the time of writing, scores of casualties and hundreds of thousands of infected cases have already taken place across the globe. In Australia, observers view the immediate global health threat as a factor that would lead the country into a recession and even a potential depression. ABC News reported early in May 2020 that one million workers have been struggling with job loss due to the global healthcare crisis. They lost their means of livelihood since the Federal Government of Australia ramped up social distancing rules to limit the spread of the COVID-19 virus.
Also, the Australian Bureau of Statistics found out that the number of jobs had plummeted by 7.5 per cent. The group discovered that this drop took place between the middle of March and April 2020. Hence, people are wondering how they are going to manage financially, considering that some employers had already implemented retrenchment processes and enforced pay cuts. Moreover, these consumers have had no choice but to put their personal plans on hold. These goals include home-buying, university enrolment, overseas holidays, and other vital purposes. With the current bleak economic scene, the banks in the country found ways to assist their consumers in their financial woes.
Australian Banks Target Reduction of COVID-19 Effects to Clients
As the coronavirus dilemma continues to impact the world adversely, financial institutions in Australia, both mainstream and small players alike, are offering special term deposit rates. The four major Australian financial firms were among the first lenders to declare modifications in their interest rates, following the second rate cut pronouncement of the Reserve Bank of Australia. These banks include the National Australia Bank, Commonwealth Bank of Australia, Australia and New Zealand Banking Group, and Westpac Banking Corporation. Furthermore, the rate offerings of the banks are for a limited time and aim for their clients to have a safe location to keep their hard-earned money. The lenders are possibly compensating for the two slashes to the official money rate that took place in March. These cash rate cuts are the first-ever instances to happen twice in the same month. Clients who are interested in the new special rates that the financial service providers offer can encounter them in the four leading Australian lenders and other financial institutions. Examples of these financial service providers consist of the following:
(1) Westpac Banking Corporation
Peter King relayed that they at the Westpac Banking Corporation are determined to help their clients as the coronavirus pandemic pummels the country. The acting chief executive officer of one of the major Australian banks affirmed that the present time is extraordinary and that they understand that plenty of Australians feel distressed. King stated that they desire their clients to keep in mind that the Westpac Banking Corporation is at their side during the pandemic, which he referred to as a once-in-a-lifetime phenomenon. Since March 27, the lender had effected two relevant term deposit rate alterations. The first special rate is for clients who are 65 years old and above. It is an eight-month term deposit account with an interest rate of two per cent per annum. Meanwhile, the other new unique offering of the Westpac Banking Corporation is a one-year deposit with 1.7 per cent interest rate per annum. The bank announced that this COVID-19 support features a surge of 70 basis points and it is for deposit amounts worth up to $500,000.
(2) Auswide Bank
Auswide Bank has increased its 12-month term deposit interest rate to 1.75 per cent per annum as a response to the COVID-19 crisis. Moreover, the Australian financial service provider is holding interest rates steady on both pension and savings accounts. Martin Barrett assured their customers that they at Auswide Bank are working hard to support their staff and clients who are grappling with the coronavirus pandemic. The managing director of Auswide Bank said that the measures his group has taken are on the same page as the concentration of the Reserve Bank of Australia. Furthermore, Barrett pointed out that their rate offering would assist their clients and the local communities tremendously as they wade through the present uncertainty and future challenges.
(3) National Australia Bank
Starting March 24, 2020, the National Australia Bank has launched a new ten-month term deposit account. The personal customers of the bank will benefit from this offering, which features an interest rate of 1.75 per cent per annum. Also, the rate modification covers client deposits worth up to $2 million. Ross McEwan affirmed that the present low-interest rate scenario is painful for the Australian savers. He cited that they at the National Australia Bank, therefore, aim to bolster their personal and business clients’ financial needs. Furthermore, the chief executive officer of the lender confirmed that they desire to make cash available to their customers, especially when they require it the most. Ross added that the bank is open 24/7 for any concerns or queries that their customers may have amid the coronavirus crisis.
(4) AMP Bank Limited
Rod Finch remarked that Australia is facing unprecedented and challenging times. As managing director of AMP Bank Limited, he affirmed that his banking institution recognises the significant role that they need to play in supporting their customers amid the coronavirus pandemic. In light of his statement, the bank has released its customer support package. AMP Bank Limited’s deposit clients can enjoy the term deposit product with the new interest rate of 1.8 per cent per annum. The bank’s offering is for six months to one and a half year. Plus, the new interest rate is available for customers with a minimum of $25,000 in deposits. From March 30 to October 1, 2020, everyday and savings account holders can benefit from AMP Bank Limited’s waiver of the monthly account keeping charge as well.
(5) Commonwealth Bank of Australia
As among the leading banks in the economic powerhouse of Oceania, the Commonwealth Bank of Australia has made a 60-basis-point increment to its one-year or 12-month term deposit rates. This amendment takes the 12-month interest rate of the bank to 1.7 per cent per annum. Matt Comyn confirmed that this interest rate increase is for the benefit of the Commonwealth Bank of Australia’s deposit customers. The chief executive officer of the lender said that the new rates would most especially help their senior citizen clients who depend on their savings. Comyn cited that their offerings to their customers would make sure that all Australian people would be able to get a significant return on their savings. This earning is over 1.45 per cent higher compared to the official cash rate, he explained.
Besides these five banks, other financial services providers have implemented term deposit rate changes. They comprise Westpac-owned banks BankSA, St. George, and Bank of Melbourne; ING, Bankwest, Bendigo and Adelaide Bank, ME, Citi, and CUA. Moreover, HSBC, Suncorp, Macquarie Bank, Defence Bank, Newcastle Permanent, and Hunter United have effected the same measures. Kaber McLean relayed that they at HSBC Australia have the responsibility to support their clients, staff, and the local economy amid the coronavirus pandemic. The chief executive officer of the financial service provider cited that they keep plenty of Australians in mind, especially those who are anxious about the wellness and financial repercussions of the outbreak. McLean said that they intend to deliver relief to the people under pressure, giving them the most suitable solutions for their current status.