Australians are continuing to challenge the myth that they are only good at spending and not saving, according to the latest official banking statistics.

Data collated by the Australian Prudential Regulation Authority shows that retail banking customers pumped almost $50 billion into bank deposit accounts in 2014.

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The total value of consumer deposits held at all Australian banks stood at $691.5 billion at the end of November compared to $643 billion on January 1, 2014.

This represents a 7.5 per cent rise in bank deposits for the year.

Pitiful interest rates no deterrent

Perhaps the most remarkable feature of the savings surge was that it occurred during a period when most banks were slashing rates on term deposits, online saver accounts and traditional passbook savings products.

The big four banks accounted for more than 86 per cent of the deposit growth.

Another surprise revealed in the data was that the major banks – NAB, ANZ, Westpac and CBA – accounted for more than 86 per cent of the deposit growth even though they continue to offer some of the poorest returns to depositors on deposit accounts.

The major banks attracted an additional $42 billion from retail depositors during the year, taking their aggregate consumer deposit base to more than $564 billion.

Commonwealth Bank had the biggest inflow of deposits (up almost $15 billion) along with Westpac (up $13 billion).

Despite offering one of the best at-call rates in the market through its U-Bank subsidiary, National Australia Bank

could not match the growth of the other big banks.

NAB attracted an additional $7 billion of consumer deposits.

Regional banks struggling to attract depositors

Many second-tier banks did not match the massive growth enjoyed by the big banks last year.

Bank of Queensland actually suffered a net outflow of deposits, with its consumer deposit base falling around $100 million to $16.9 billion during the year.

Bendigo and Adelaide Bank confirmed itself as the leading challenger brand in the national retail banking market after attracting $1 billion in new deposits.

Bendigo is now the fifth-largest retail banking player in the country on a measure of consumer deposits. It ended the year with a deposit base of $21.2 billion.

Dutch-owned ING Bank is not far behind after attracting almost $700 million to take its deposits base above $20 billion.

Few signs of price competition

Commonwealth Bank’s ability to attract more deposits than any other bank last year was truly remarkable in light of the fact that its interest rate offers on deposit products now lag most other banks.

In the online saver market, Commonwealth offers an ongoing rate of only 2.5 per cent, which is not very competitive when you consider that you can get ongoing rates of above four per cent with UBank and ING Direct.

In fixed deposits, CBA also trails the pack.

According to market research site Mozo.com.au, CBA only coughs up 2.4 per cent on a six-month fixed deposit of $10,000.

While this rate beats the pitiful offer of 1.5 per cent from G&C Mutual Bank, most financial institutions are delivering more than three per cent to term depositors on six-month deposits.

The Mozo database ranks CBA’s six-month term deposit rate offer as the 63rd-best out of 68 products listed in its market table.

ING DIRECT, ARAB BANK and Bankwest offer the best rates on six-month deposits, with each paying 3.5 per cent or better.

Online savers are big losers

One of the great rip-offs in retail banking is the miserly rates the banks offer on most internet deposit accounts.

Until a few years ago, online saver accounts offered the highest rates to depositors because they are the cheapest type of account for the banks to manage.

Customers who bank online actually do most of the tasks that tellers are paid to perform for over-the-counter services at branches.

Online banking offers no payoff. Photo: Shutterstock

The banks want us all to manage our accounts online, but they are no longer prepared to reward customers with premium deposit rates.

Online savers are now heavily subsidising the lending activities of the banks.

The best ongoing rates for online saver accounts are offered by UBank (4.02 per cent) and ING Direct (4 per cent).

To get either of these market-leading rates there are a few catches, including the requirement to open a transaction account with either bank.

Probably the worst online savings account in the Australian market is marketed by G&C Mutual Bank. On accounts with balances of less than $100,000, G&C is only willing to pay interest of 0.5 per cent. You will only get a one per cent return if your balance exceeds $100,000.

Overall, interest rates are unlikely to rise any time soon, with many commentators predicting that the Reserve Bank of Australia (RBA) will cut the cash rate – currently 2.5 per cent – later this year in an attempt to stimulate Australia’s struggling economy. Banks broadly base their interest rates on the RBA cash rate.