THE past month has been a worrying time for many elderly Commonwealth Bank customers who, while warned of major changes to their specialised pension accounts, were left in the dark about what this actually meant for their savings.
The Senior received a number of calls from readers who had been told by the bank, one of Australia's big four financial institutions, that from May 1, as part of "simplifying" account terms and conditions, the pensioner security accounts would be "updated" and no longer connected to the government deeming threshold.
A letter to account holders said the accounts bands - which earned varying degrees of interest from .25 per cent for balances under $2000, to 1 per cent for $2000- $49,200 and 2 per cent for more than $49,000 - would be replaced with four new bands - under $10,000, $10,000-$49,999, $50,000- $249,999 and $250,000 and over.
However, the bank did not tell customers what the interest rates would be for the new bands, leaving many fearful that their small-balance accounts would end up without any interest or with reduced interest.
One reader, who is in her 80s, said her local branch had confirmed the changes meant no interest would be paid on balances under $10,000.
At the time of going to press, a Commonwealth Bank spokeswoman said she could not say what interest rates would be paid and an announcement would be made on May 1.
"While it's too early to confirm details on the interest rates, we wanted to allow customers time to understand deposit interest rates will move away from the government deeming thresholds and in place we will introduce four new balance bands," she said. "We understand some customers will be unsure how this change will impact them and we encourage them to speak with us to ensure they understand the options available."
Paul Versteege from advocacy group the Combined Pensioners and Superannuants Association said traditionally bank accounts based on the deeming rate did not work out too well for pensioners and many banks had moved away from them.
He said seniors should shop around for the best deal. "People should not be persuaded that just because something is marketed as a seniors' account it is the best one for them."
