Banks Cut Savings First: The Pre-RBA Asymmetry Explained

Three RBA decisions in 2025 delivered 75 basis points of cuts to the Australian cash rate. For borrowers on variable mortgages, those cuts flowed through to repayments over weeks. For savers, the direction of asymmetry ran the other way: cuts arrived fast and sometimes early. In one documented case, reported by financial media in late 2025, ANZ moved savings account rates down ahead of an RBA meeting - before the Reserve Bank had announced any decision. The cut had not yet happened. ANZ had already reduced what it was paying depositors.

When the RBA raised the cash rate by 25 basis points in February 2026 - the first increase after three consecutive cuts - ME Bank passed on 15 of those basis points to savings customers, according to analysis from savings.com.au. Major bank variable mortgage rates moved the full 25 basis points within the standard announcement window. This divergence is not an anomaly. It is the observable outcome of a structural asymmetry in the obligations banks face for deposit rates versus lending rates - a gap embedded in the Banking Code of Practice that most depositors have never been told about.

How Banks Set Savings Rates - and Why the RBA Is Not the Only Variable

The RBA's cash rate is a target for the overnight interbank lending market. It influences the cost at which banks fund themselves short-term, but it does not dictate the rate banks pay retail depositors. Banks set savings rates based on a combination of wholesale funding costs, competitive positioning, net interest margin objectives, and - critically - what the Code requires them to disclose when they make changes.

The Banking Code of Practice 2022, which governs the conduct of most Australian retail banks, distinguishes meaningfully between deposit and lending products. For variable rate home loans, banks must notify customers of rate changes within specific communication requirements. For savings accounts, the Code includes a 30-day advance notice requirement when a bank lowers a savings account interest rate. That is a meaningful consumer protection. It does not address the magnitude of the reduction, does not prohibit preemptive cuts (provided the 30-day notice is issued), and does not require full pass-through when rates rise.

The practical effect of this regulatory structure is visible in the data:

The asymmetry does not mean banks are acting unlawfully. It means the regulatory environment places materially different obligations on banks depending on which side of the balance sheet the product sits. Deposit rate pricing has more discretion than mortgage rate pricing - and banks use it.

The Preemptive Cut and What It Costs

The ANZ savings rate reduction ahead of a 2025 RBA meeting is the clearest documented example of preemptive asymmetric behaviour in the recent rate cycle. The bank moved its deposit pricing based on its forward view of where the cash rate was heading, rather than waiting for the official announcement. This is legal, consistent with the 30-day notice framework, and consistent with how banks manage their interest rate exposure on the liability side of the balance sheet.

The dollar cost to an individual saver of a preemptive cut is modest in isolation. The principle matters more than the amount in any single case. To illustrate the mechanics: consider a balance of $150,000 at an illustrative ongoing savings rate of 4.50% per annum (used here for illustration only - not the current rate, which is visible on RatePilot's live comparison). A preemptive cut of 25 basis points applied 7 days before the RBA acts produces the following:

• Daily interest at 4.50%: $150,000 x 0.0450 / 365 = approximately $18.49
• Daily interest at 4.25% after preemptive cut: $150,000 x 0.0425 / 365 = approximately $17.47
• Lost income over 7 days: approximately $7.14

Seven dollars on one account. Applied across ANZ's large personal banking customer base, the aggregate income transfer is considerable. It was executed entirely within current regulatory obligations. The depositor has no grounds for complaint and no mechanism for recovery. No rule was broken. The bank identified that a cut was probable, moved first, and the Code permitted it.

Partial Pass-Through When Rates Rise

The February 2026 RBA hike provides the clearest recent example of upside asymmetry. The Reserve Bank raised the cash rate by 25 basis points. ME Bank passed on 15 of those basis points to savings customers, according to rate tracking published by savings.com.au. The gap between what the RBA delivered and what ME Bank savers received was 10 basis points.

On a single account balance for one month, 10 basis points is nearly invisible. Extended across a year and applied to a meaningful balance, the shortfall accumulates:

Based on the difference between full and partial pass-through of 25bps applied annually. Indicative figures only.

ME Bank is not an isolated case. Across the 2022-2023 hiking cycle - when the RBA raised the cash rate from 0.10% to 4.35% across thirteen decisions spanning May 2022 to November 2023 - analysis from rate comparison sites consistently found that savings account increases lagged RBA decisions by weeks, and that bonus rate and introductory account components received smaller proportional increases than the headline cash rate movement implied.

The Asymmetry Compounds Across a Full Rate Cycle

The 2022 to 2026 rate cycle illustrates what happens to depositors when asymmetry operates in both directions over time. The RBA raised aggressively through 2022 and 2023. It cut three times in 2025. It hiked again in February 2026. At each directional inflection, the timing and magnitude asymmetry operated in the bank's favour: savings rate reductions arrived fast and sometimes early; savings rate increases arrived later and sometimes partially.

The net effect across a full cycle is that the effective return savers received sat consistently below what a mathematically symmetric pass-through would have produced. The gap at any single moment is small. Compounded across years and tens of thousands of accounts, it is not.

The product types most exposed to asymmetric treatment are bonus savings accounts - where the bonus component can be restructured or reduced independently of the base rate - and introductory savings rates, which reset automatically at rollover on terms entirely at the bank's discretion. Ongoing base rates face more direct competitive scrutiny when they change and are therefore harder to cut quietly. This does not make them immune, but it does make the asymmetry less extreme.

How to Position Your Savings Given This Structure

Several practical considerations follow from this analysis. These are structural observations, not personal financial advice - individual circumstances vary and consideration of your own situation is necessary before any financial decision.

1. Watch for RBA signalling before decisions, not after. When the market prices in a cut with high probability - as it did repeatedly through 2024 and into 2025 - some banks will have begun adjusting deposit rates before the official announcement arrives. Monitoring your savings rate in the weeks before a scheduled RBA meeting, not just in the weeks after, may give a more accurate picture of what is already in motion.

2. Filter for ongoing base rates, not headline rates. The highest rate on a savings comparison table is almost always a bonus or introductory rate with conditions attached. Ongoing base rates - what you earn unconditionally - change less frequently and attract immediate public attention when they fall. Comparing base rates gives a more stable picture of what you will actually earn across a full rate cycle.

3. Consider term deposits ahead of cutting cycles. When the RBA signals a cutting cycle, a term deposit locks in the prevailing rate for the full term regardless of what the bank subsequently decides to pay on savings accounts. The cost is reduced liquidity access. Term deposit vs savings account covers this decision framework in detail, including at what rate differential and time horizon the term deposit structure becomes the more defensible choice.

4. Audit your account rate after each RBA decision. After any RBA move, comparing your current savings account rate against the live market on RatePilot tells you whether your bank passed on the full change. If it did not, that is objective information - useful in a retention conversation with your bank, and a reasonable basis for reviewing where you hold your deposits.

5. Know how to move if warranted. The process of switching banks in Australia is more straightforward than most people expect. The primary friction points are BPAY billers, direct debits, and salary redirection - and most banks now provide assistance tools for transitions.

The rates shown above are live market data updated from RatePilot's product database. Whether any of them represent full pass-through of the current 3.85%% cash rate - and which institutions moved first and completely after 4 February 2026 - is the question this data answers in real time.

What the Code Requires and What It Does Not

The Banking Code of Practice 2022 provides one concrete protection for savings account holders: 30 days advance notice before a bank lowers an interest rate on a standard savings account. This is a real and enforceable standard. It does not, however, require that the reduction be proportional to or smaller than any RBA movement. It does not create a symmetric obligation to pass on rate increases in full or on any specific timeline. And the 30-day notice period and the timing of an RBA decision can coincide, meaning a bank can issue its notice immediately after an RBA announcement and still comply with the Code while cutting rates on the day the notice period expires.

ASIC's role is primarily disclosure - ensuring banks communicate changes as required, not that they make economically symmetric choices. APRA supervises capital adequacy and systemic risk. Neither regulator currently requires symmetric pass-through of RBA rate movements to savings accounts.

The Banking Code Compliance Committee monitors adherence to the Code and publishes annual findings. However, it does not publicly identify individual institutions in most findings, and it has no direct financial penalty mechanism equivalent to a formal regulatory sanction. Competitive pressure and reputational consequences are the primary restraints on asymmetric behaviour - and both operate imperfectly, particularly for the major banks where switching friction is high.

For a complete record of the cash rate and its historical movements, the RBA cash rate tracker on RatePilot provides a full timeline of every decision and the direction of each change.

The Bottom Line

Australian banks face weaker regulatory obligations for savings rate changes than for mortgage rate changes, and the data from the 2022-2026 rate cycle shows they use that flexibility consistently in their own favour - cutting deposit rates early or preemptively, and passing on hikes partially. The current cash rate is 3.85%%, most recently changed on 4 February 2026. The next scheduled RBA meeting is 18 March 2026. Whether your savings account currently reflects that rate - or whether your bank has already begun moving ahead of it - is a live data question.

Compare current savings rates on RatePilot to see which banks are paying the highest ongoing rates and to check whether the most recent 25bps basis point move has reached your account in full.

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This is general information, not financial advice. Consider your own circumstances before making financial decisions. Product information is sourced from RatePilot's database and is updated regularly. Rates, fees, and terms are subject to change - always confirm with the provider.