It has been a week since the Reserve Bank of Australia raised the cash rate to 6.75% on November 7. You’ll expect the response to be polarised. If you are in debts with mortgage or credit card loans, then expect a letter from the banks demanding more money each week. However if you have cash investment in saving accounts, then your bank will hopefully pass on the higher interest rate to the investors.

Usually the mortgage lenders will pass on the increases in no time, whereas saving banks will only react after a week or two. However from what I have observed one week after the rate raise, the competition in the online saving market has actually driven the banks to raise rate before many lenders.

Right after the announcement of much-expected rate raise on 7^th of November, many online saving banks also sent out their follow up press release of their own rate raises and how generous they are passing all the benefits to their customers.

From ING DIRECT‘s November media release (PDF file, 63kb):

ING DIRECT is raising the interest rates on its savings products, including its flagship Savings Maximiser, Term Deposits and Business Optimiser.

The rate on its high-interest, no-fees Savings Maximiser will increase by 0.25%, from 6.15% p.a. variable to 6.40% p.a. variable, effective from Friday 9 November.

Then we have BankWest’s TeleSaver‘s Media release on the same day, as reported on OzBargain:

Customer champion BankWest has today announced that it will once again pass on the cash rate rise to deposit customers.

For retail customers this means the BankWest TeleNet Saver 12 month variable introductory interest rate will increase 20 basis points from 7.00 per cent p.a. to 7.20 per cent p.a, with the standard interest rate to increase 25 basis points from 6.50 per cent p.a. to 6.75 per cent p.a.

RaboPlus was a little bit slow, who has finally made a press release via PRWeb 5 days after the event on 12 November, and increased their standard rate to 6.90%:

RaboPlus – the online banking division of AAA rated Rabobank -lifted its on-call variable interest rate from 6.70 per cent to 6.90 per cent per annum on its online savings deposits, effective from midday today, November 12, 2007.

Are you affected by the interest rate raise? In a good way or in a bad way?