Current cash rate set by the RBA: 4.10%

What is the cash rate?

The cash rate is an official interest rate target set by the Reserve Bank of Australia (RBA). It is the interest rate banks pay to borrow funds from other banks in the overnight money market. This rate can be changed by the RBA at board meetings throughout the year in its bid to keep the nation’s inflation within its target range of two to three percent.

How does the cash rate affect me?

The cash rate is closely linked to interest rates on consumer products such as loans and savings accounts. Generally, as the cash rate increases, so does the interest rate on things like home loans, personal loans, car loans, savings accounts and term deposits. As it decreases, the interest on these products also generally decreases.