Savings institutions will offer you the lowest rates they can...

Savings institutions will offer you the lowest rates they can get away with. That's how CBA makes so much money - they offer subpar interest rates on deposits, but no one bothers to change providers.

SWF has a lot of deposits, but I see them as being in a weaker position than banks. Switching banks is hard because you're dealing with operational deposits. They're deposits in accounts that you pay your daily bills from and changing that is a huge hassle. SWF's deposits by contrast can be easily moved without much risk or cost to the account holder. That's reflected in large double digit year on year percentage drops in the deposit base for SWF.

Nevertheless, I'm comfortable with SWF's deposits situation, because I expect the worst of the declines have taken place already (most of the rate sensitive customers will have already moved), and the share price has more than reflected the declining deposit base. Newer initiatives such as automatically re-directing client dividends to their SWF accounts might help arrest the decline somewhat.