Intro Rate Traps: What Happens When the Honeymoon Period Ends?

Savings account intro rates look great on comparison tables. Rabobank HISA advertising 5.65%. ING Accelerator showing 5.65% for new customers. ubank's Welcome Rate at 5.60%. Bankwest Easy Saver at 5.50%.

All of those rates are real — but they only last for four months. After that, you're on a different rate entirely. If you haven't planned for it, you'll be earning significantly less than you expected, often without realising it.

What an Intro Rate Actually Is

An introductory rate (also called a honeymoon rate) is a promotional rate offered to new customers for a fixed period — typically one to four months. Banks use them to attract deposits. The economics are straightforward: a bank wants your money, offers a premium rate to get it, then rolls you onto a lower ongoing rate once you're established.

There's nothing deceptive about this — it's disclosed in the product's terms and conditions. But comparison tables often lead with the intro rate because that's the highest number, and it's easy to assume that's what you'll be earning long-term.

How Big Is the Drop?

The gap between intro and ongoing rates varies, but it can be substantial. Some examples based on publicly available rates as of early 2026:

Rabobank HISA: 5.65% for the first four months → reverts to a much lower base rate (no bonus conditions required, but the base rate is modest)
ING Savings Accelerator (new customers): 5.65% for four months → ongoing rate requires monthly deposit conditions to maintain
ubank Save (Welcome Rate): 5.60% for four months → reverts to the standard bonus rate, which still requires monthly deposit conditions
Bankwest Easy Saver: 5.50% for four months → reverts to a lower base rate

If you deposited $50,000 into an account offering 5.65% for four months, then reverted to 3.50% for the remaining eight months, you'd earn roughly $1,700 less over the year compared to staying at 5.65%. That's real money.

Why People Get Caught

The honeymoon period passes quietly. Banks don't typically send you a notification to say "your intro rate expired yesterday." You'd need to actively check your interest payments or log into your account and look at the current rate being applied.

Most people don't do this. They set up the account, see a solid rate, and assume it continues. By the time they notice the rate has dropped — usually when they check their annual interest for tax purposes — they've been on the lower rate for months.

The Rate Chasing Strategy

The direct solution is to move your money when the intro period ends. Open a new account at a lender offering an intro rate, transfer your balance, earn the promo rate for four months, then move again.

This works — and some savers do it deliberately. But it has costs:

It takes time and effort to open accounts and transfer funds
You'll accumulate accounts across multiple lenders (managing closures is its own admin)
Some accounts require an existing transaction account with the same bank, adding complexity
Tax reporting across multiple institutions requires more organisation at the end of each financial year

If you're prepared to move every four months, you can consistently earn above the ongoing market rate. If you're not, you need a different strategy.

Better Alternatives for Savers Who Don't Want to Chase

If managing intro rates isn't worth the effort, focus on accounts with strong ongoing rates instead. Some accounts don't offer intro rates at all — they pay a consistently competitive rate provided you meet their bonus conditions.

MOVE Bank's Growth Saver has been a consistent high-rate option without an intro component. Up Bank's Essentials Saver similarly avoids the honeymoon trap. These accounts pay their rates based on meeting conditions (typically a monthly deposit requirement), not on being a new customer.

The trade-off: ongoing conditional rates often require monthly action to maintain — a minimum deposit, or spending a certain amount on a linked debit card. That's a different kind of friction, but at least it's predictable and doesn't involve switching accounts every four months.

What to Do Right Now

If you have a savings account open, check three things:

Is the rate you're earning the intro rate or the ongoing rate? Log into your account and check the current rate being applied — not the advertised rate on the bank's website.
When did your account open? If it was more than four months ago and you signed up during a promotional period, there's a good chance the intro rate has already expired.
What is the current ongoing rate? If it's significantly below what was advertised when you signed up, compare alternatives.

This is general information, not financial advice. The right savings account depends on your balance, how actively you want to manage it, and your personal tax situation.