Banking & Saving - Government 'will hopefully cut tax on interest from savings accounts'

Cutting interest from savings accounts will hopefully be a move made by the government in the near future, according to one writer.

The government will hopefully cut tax on the interest from savings accounts.

This is according to David Potts, writing for the Age, who notes that banks have "quietly" been cutting deposits, as well as lifting interest.

If the tax was cut on a savings account then the financial organisations could offer less for term deposits but Mr Potts cannot imagine "they'd want to be in the government's bad books right now".

Westpac – which has a range of credit cards – has been the "the worst offender" in slashing term deposits, such as reducing a five-year rate to 6.85 per cent last week after it was eight per cent in December and 7.05 per cent last month.

However, the writer added: "Yet there's no mistaking the trend - if you're a saver, rates have already peaked."

Last week, Westpac wrote to its credit card customers to inform them they will need to pay interest on their charges in the near future.

By Brett Clement