This week’s interest rate cut is another blow for older Australians who rely on term deposits for investing their often limited savings, National Seniors says.
The Reserve Bank of Australia on Tuesday slashed its cash rate to a record low of two per cent, the second in 2015 and the 10th consecutive reduction since November 2011.
National Seniors chief executive Michael O’Neill said the continuing run of interest rate falls was bad news for those on limited and often fixed incomes.
“Many pensioners and self-funded retirees rely on term deposits because of the security and peace of mind they bring,” O’Neill said.
“Another rate cut just adds to their worries about basic expenses as well as those little treats such as a coffee with friends or a trip to the movies.”
Older Australians would receive even less if the federal government goes ahead with its proposed bank deposit tax, O’Neill said.
“Banks have already said they would pass the tax onto consumers, providing them with even less return on their hard earned savings.”