Many Australians are adjusting to a lower-interest-rate environment. With inflation easing, the Reserve Bank has cut rates 3 times in 2025 and may cut rates again. As a result, rate cuts are already lowering savings and term deposit returns.
In this blog, we explain how falling rates may affect your income. Additionally, we explain what you can do to prepare. LBW supports clients through these changes. Our Geelong advisors give clear, helpful advice to protect your savings.
How a low-interest rate environment impacts your savings
The Reserve Bank may lower rates again soon. Many banks have already reduced the interest paid on savings accounts and term deposits.
For example, the average 12-month term deposit rate dropped from 4.50% to 3.70% since July 2024. This deposit rate drop shows how a low-interest rate environment can reduce income for savers, especially people who rely on interest to live.
For this reason, LBW helps clients plan for these types of change. Our Geelong financial advisors work with you to manage cash flow and savings goals.
Less interest income can affect your spending
Lower savings income often leads to lower spending. As a result, lower spending can slow the economy and make people feel less secure. In a low-interest-rate environment, people may avoid saving. They may also put off big decisions or take on more debt.
Our financial planning team of advisors can help you stay in control. When clients work with LBW, we support them with simple, clear steps to protect their savings and peace of mind.
People are moving from saving to investing
Many households have built up extra savings in recent years. Now, fewer people rely on interest income alone. New rules could help this shift. For example, these may include better advice, easier tax rules, and simple learning tools.
In a low-interest-rate environment, people need to think more about where they put their money.
LBW’s team of experienced Geelong financial advisors can help you explore a range of income strategies from dividend shares to income funds and review your plan in a low-interest rate environment or if interest rates shift again. Our goal is to give you clarity and confidence as you take the next steps towards building a secure financial future.
If you’d like tailored advice for your circumstances, we’re here to help. Call us on (03) 5221 6111 or visit www.lbwca.com.au to book an appointment with one of our trusted advisors.
This blog provides general educational information only. The content does not take into account your personal objectives, financial situation or needs. You should consider taking financial advice tailored to your personal circumstances.
LBW Business + Wealth Advisors is an Authorised Representative of LBW Wealth Pty Ltd ABN 56 652 382 128 AFSL 534569. Please see our website www.lbwca.com.au or call 03 5221 6111 for more information on our available services.
