The Reserve Bank of Australia has announced its decision on the official cash rate for July, following market speculation that there would be another cut.
In an unprecedented move, the Reserve Bank of Australia (RBA) has cut rates for the second straight month.
The RBA has again cut the cash rate today to a new record low of just 1.00%, down from 1.25% in June.
For anyone with a home loan this is likely good news. When the RBA cut the cash rate last month, many lenders passed on the rate cut, either in full or in part, to their customers with home loans meaning the amount customers are charged in interest is reduced.
However, if you’re one of the hundreds of thousands of Australians with money sitting in a savings account who depend on the interest received it’s not so great. Retirees in particular are expected to feel the effects as soon as the banks pass on this reduction.
Today’s cut is a sign that the RBA wants to continue to stimulate the Australian economy and will take swift action to do so.
It’s a timely reminder to stay on top of your savings account and see if you could be getting a better deal – especially as high rates will be harder to find.
The best way to navigate the world of low interest rates depends very much on an individual’s personal circumstances. Good advice is critical, and a licensed financial advisor is an important first step. Remember that there are always appropriate investments available out there, whether interest rates are falling or climbing. Choosing and finding the right option for your personal situation depends very much on whether you’re willing to throw caution to the wind in an uncertain market, or would rather play a steady hand with a strong, stable, regular return^. The Skyring Fixed Income Fund is a great way to flip the script in today’s low interest rate environment. Invest a few minutes of your time reading about it here.