"Based on previous responses to the cash rate change we would anticipate a reduction in deposit interest rates."
George said interest rates for on-call accounts would be hit first as most term deposits would already have priced a cut into their rates.
Reserve Bank figures show Kiwis had $149,019 million in the bank as of January while housing loans totaled $132,833 million as of the latest December figures available.
Much of that money is sitting in either cheque or savings' accounts.
George said while the next drop might be small the cumulative effect of falling interest rates over the last year was a big hit.
Someone with $10,000 in the bank would now be getting $120 a year less in the hand compared to a year ago based on the rate falling from 3.35 per cent to 2.1 per cent which was the average base interest rate for an online account.
David Boyle, head of investor education at the Commission for Financial Capability, said it was particularly hard for those on fixed incomes like retirees.
A lot will have their money in term deposits. This is just another knock for them.
Boyle said his concern was that people would seek out higher returns without considering what risks they were taking with their money.
"If you see some new options coming out it would be really important to look at the risk associated with that. It's all about getting your money back."
He said some people may have to consider spending their capital rather than trying to live off the interest.
Those looking to invest their money elsewhere should get advice if they had not done it before and make sure they read the fine print, he said.
Some savers overseas are having to pay their bank to look after their money but Boyle said he doubted it would come to that here.
"I would never say never, but I would hope not."
How to get more interest on your savings:
• Be on the lookout for promotional rates, particularly on term deposits.
Often an institution may offer a high promotional rate on a particular deposit. It could be a 4 month or a 7 month terms- something outside of the standard 12 months. So if you're investing cash, make sure you look at all terms available from institutions and try to find the promotional sweet spot.
• If you have a home loan, a mortgage offset account is likely to give a better 'return' on your money than a term deposit or call account.
• Don't just leave all of your money in the bank. Consider spreading it around other investments like bonds or shares.
Source: Canstar New Zealand
