How the rate cut could screw you over Today's RBA rate cut is terrible news for Australia's savers. THE new record-low interest rate is good news for mortgage-holders but it will end up costing a lot of Australia's savers money. If you have a savings account, in order to make up for the money you lose through inflation and tax you need to earn at least 3.5 per cent interest. And right now, even before the banks have factored in today's rate cut, less than a third of Australian savings accounts are paying an ongoing interest rate of more than 3.5 per cent. Kirsty Lamont, director of financial comparison website Mozo, says the Reserve Bank of Australias's decision to cut rates to 2.5 per cent is terrible news for Australia's savers who are now in very real danger of losing money. "There are already tens of thousands of savers who are not earning enough interest so they're literally going backwards on their savings," Ms Lamont said. And while banks can be cagey when passing on the RBA's rate cuts to mortgage holders, they are quick to pass them on to savers. "Absolutely we'll see the banks passing that through within the next couple of days to savers," Ms Lamont said. The rate cut will hurt two groups in particular: young people who are trying to save money for things such as cars and home deposits, and people approaching retirement who are building up their nest egg. If you do have a savings account, Ms Lamont suggests you check your rate. If you're earning less than 3.5 per cent you should switch now. You can access good rates in one of two ways. Switching bank accounts each time higher introductory rates run out is a great way to make sure your always accessing the top rate on the market. But not everyone has the time or inclination to do that every six months," Ms Lamont said. Otherwise you can look for accounts that pay higher rate based on savings behaviour, so you get a higher rate if you meet conditions like making a minimum deposit amount each month and no withdrawals. Best savings account rates RaboDirect's High interest savings - 4.76 per cent (Condition: bonus rate for 4 months) RAMS' RAMS Saver - 4.76per cent (Condition: minimum deposit $200, no withdrawals) ING DIRECT's Savings Maximiser - 4.75 per cent (Condition: for 4 months from account opening for new customers, on balances up to $250,000) UBank's USaver - 4.66 per cent (Condition: monthly deposits) Citibank's Online Saver- 4.65 per cent (Condition: bonus rate for 4 months) HSBC's Serious Saver - 4.65 per cent (Condition: bonus rate for 4 months) All rates based on a balance of $10,000, current at 6th August 2013