Australian banks adjust rates amid RBA monetary policy shifts

Australian financial institutions are adjusting rates in response to the Reserve Bank of Australia's monetary policy. The RBA raised the cash rate from 3.6% to 4.35% between February and May 2026, and inflation is not expected to return to the target midpoint until late 2027.

In the banking sector, Commonwealth Bank has increased its 12-month special term deposit rate to 5.20% p.a., the highest among the big four banks. This follows a trend where ANZ, Westpac, and NAB have maintained or aligned their 12-month rates at 5.15% p.a. Smaller lenders and digital products, such as those from Macquarie Bank, continue to offer competitive rates, with some reaching up to 5.30% p.a.

For small businesses, the sustained high-interest environment impacts borrowing costs. Variable-rate facilities, including overdrafts and business credit cards, reflect rising costs immediately, while fixed-rate loans provide stability until their expiry or review dates. Lenders are also applying higher buffers when assessing creditworthiness.