Commsec: Australia’s biggest share trading app punishes wealthy investors

CommSec, Australia’s biggest online share trading app, is punishing millionaires so it can reward the vast majority of its customers with less than $5000 in savings, the Commonwealth Bank says.

Until October 24, those with more than $1 million in a Commonwealth Direct Investment Account linked to a CommSec trading account earned 2.6 per cent per annum interest. That has been slashed to 1.75 per cent.

This change has also coincided with equivalent interest for those with less than $5,000 in savings doubling to 0.1 per cent, up from 0.05 per cent for accounts that have been open since November 2012.

A Commonwealth Bank of Australia spokesman said the change was about rewarding the 90 per cent of customers with a balance of less than $5000 who would “now receive a better rate after the changes than previously”.

The change has also coincided with the introduction of a high-interest savings option, known as CommSec Notice Investor, which offers high-yielding interest of 3.7 per cent per annum for those who invested their money in this account for seven days instead of in shares.

The equivalent interest for two days is 2.95 per cent per annum.

Fewer savings thresholds

Under the changes, the number of interest savings thresholds for CommSec customers has been halved to four, down from eight.

Those with $250,000 to $999,999 will now receive 1.15 per cent interest per annum. Previously, those with $250,000 to $499,999 in savings received 2.2 per cent interest with the 2.6 per cent rate kicking in for those with more than $500,000.

Customers with $50,000 to $249,999 are getting 0.75 per cent interest per annum. Under the old system, those with $50,000 to $99,999 received 1.3 per cent per annum, which rose to 1.9 per cent for those with $100,000 to $249,999.

Those with $50,000 or less are getting 0.1 per cent interest. This is a big change from the old structure where those with $20,000 to $49,999 received 0.8 per cent interest, that cascaded down to 0.55 per cent for savings of $10,000 to $19,999 and 0.05 per cent for those with $9,999 or less.

But there is controversy about the public notice, with the new rates not featuring on the CommSec website until October 24, the day the changes came into effect.

The spokesman said notices were published in The Australian newspaper on September 24 and October 17.

But the Commonwealth Bank’s 1.3 million direct investment account customers didn’t receive notice about the new CommSec Notice Investor product until October 24, and it was for active customers with a share trading account who had opted to receive marketing messages.

The Commonwealth Direct Investment Account and the new CommSec Notice Investor product are linked with the Commonwealth Bank app for those with an everyday transaction or home loan account.

CommSec, launched in July 1995, has 40 per cent of the online share trading market.

But its rival Moomoo, which launched in Australia in 2022, said it had been providing users with better AI-generated tools to get summaries of earnings season reports.

“If you have a look at our app versus one of the older apps like CommSec, the difference is incredible,” chief executive Michael McCarthy told The Nightly.

“Ours is rich, it’s deep and it goes very, very broad and we use AI to put the most relevant information in front of you as it’s dropping.”