The big banks' term deposit rates are almost never among the best on the market.
Their need to entice new depositors is generally less pressing than the challenger banks who regularly feature on the term deposit leaderboards.
CommBank's latest round of term deposit rate cuts for terms shorter than 17 months should come as no surprise.
Australia's largest bank has been setting up its term deposit products for a cash rate cut as early as August 2024 when it first took the sword to rates and has been largely trimming them ever since.
Its previous top rate special offer of 4.75% p.a. for eight months for existing customers is now off the books, down 95 basis points to 3.50% p.a.
CBA new best rate - 4.60% p.a.
CommBank's other rate movements this week are a little less dramatic, but most are downwards apart from a lift in 10-month rates by 50-55 basis points.
CommBank's new special offer top rate, again for existing customers only, is 4.60% p.a. for 10 months for balances between $5,000 to under $2 million - but for a limited time according to CBA's website.
The latest rate cuts affirm CommBank's long-held line of an earlier cut to the cash rate than its big four counterparts were tipping.
They've since all joined the chorus, forecasting a 25-basis point cash rate cut on 18 February.
For the punters, it's safe to say term deposit rates in Australia have fallen from their peak - and it could be a good while before we see them back up there.
There are a few rates still lingering at the 5% p.a. mark if you look at shorter terms with smaller players, but the heady days of hot rates could be numbered.
Here's a selection of CBA's latest rate changes for deposits between $5,000 to under $50,000:
| Term | New rate | Change (%) | Interest paid |
| 3 months | 2.95% p.a. | -0.15 | End of term |
| 4 months | 3.10% p.a. | -0.05 | End of term |
| 8 months | 3.50% p.a. | -0.95 | End of term |
| 10 months | 4.20% p.a. | +0.55 | End of term |
| 12 months | 4.15% p.a. | -0.10 | Annually |
| 13-17 months | 4.15% p.a. | -0.10 | Annually |
Rates may drop slightly for more regular payments but are five basis points higher for deposits between $50,000 to under $2 million, except for the 10-month rate.
Gateway stays in 5% club
The customer-owned Gateway Bank remains one of the shrinking club of deposit-takers offering a six-month rate with a 5 in front.
But it's now slipped back to a bare 5.00% p.a. with Gateway trimming five basis points from its three-, six-, nine-, and 12-month rates on minimum deposits of $1,000, as follows:
| Term | New rate | % change | Interest paid |
| 3 months | 4.85% p.a. | -0.05 | At maturity |
| 6 months | 5.00% p.a. | -0.05 | At maturity |
| 9 months | 4.90% p.a. | -0.05 | At maturity |
| 12 months | 4.85% p.a. | -0.05 | At maturity |
Gateway Bank allows term deposit holders with terms of 12 months or less to decide whether interest is paid monthly or at maturity.
ING slices rates
The online bank had been another jostler in the competitive rate rankings, but its new top rate of 4.85% p.a. for three months sees it slip down the leaderboard.
ING's term deposits require a minimum opening deposit of $10,000 up to $5 million, so there is money to be made.
Even so, it has trimmed up to 20 basis points from all its term deposit offerings.
Here are its new rates for deposits between $10,000 and $5 million:
| Term | New rate | % change | Interest paid |
| 3 months | 4.85% p.a. | -0.05 | End of term |
| 4 months | 4.70% p.a. | -0.15 | End of term |
| 6 months | 4.75% p.a. | -0.15 | End of term |
| 7 months | 4.60% p.a. | -0.05 | End of term |
| 9 months | 4.60% p.a. | -0.05 | End of term |
| 11 months | 4.40% p.a. | -0.20 | End of term |
| 1 year | 4.55% p.a. | -0.15 | Annually |
| 2 years | 4.20% p.a. | -0.20 | Annually |
Mutual Bank savages old 5% rate
The Mutual Bank has taken the axe to its old 5% rates, slashing up to 205 basis points off its five-month rates to 2.95% p.a. for amounts between $1,000 and under $500,000 and 3.00% p.a. for amounts between $500,000 and $1 million.
It's also cut 75 basis points from its nine-month rates.
Here are the latest rate cuts for amounts between $1,000 and under $500,000:
| Term | New rate | % change | Interest paid |
| 5 months | 2.65% p.a. | -2.05 | End of term |
| 6 months | 4.70% p.a. | +0.15 | End of term |
| 9 months | 3.95% p.a. | -0.75 | End of term |
The rates jump by five basis points for deposit amounts between $500,000 and $1 million.
Rabobank cuts shorter-term rates
The Dutch-owned online bank is often among the more competitive term deposit rates on the market, but it's also dropped its three-, six-, nine-, and 12-month rates by up to 15 basis points this week.
Rabobank's new best rate is 4.75% p.a. for three months with interest paid end of term.
Its six-month rate of 4.55% p.a. has now dropped considerably behind the market leaders still offering 5.00% p.a. and above.
Here are Rabobank's rate changes for amounts between $1,000 and $2 million:
| Term | New rate | % change | Interest paid |
| 3 months | 4.75% p.a. | -0.10 | End of term |
| 6 months | 4.55% p.a. | -0.15 | End of term |
| 9 months | 4.50% p.a. | -0.10 | End of term |
| 1 year | 4.40% p.a. | -0.15 | Annually |
| 1 year | 4.35% p.a. | -0.15 | Semi-annually |
| 1 year | 4.33% p.a. | -0.14 | Quarterly |
| 1 year | 4.31% p.a. | -0.15 | Monthly |
Bank of Sydney leaves 5% club, lifts 3-month rate
The rate setters at Bank of Sydney, notorious for their bold moves, have dropped the six-month rate by 20 basis points from a market-leading 5.10% p.a. to 4.90% p.a. (online only) for amounts $1,000 and over.
At the same time, there's been a more dramatic 170-basis point jump in the three-month rate to 4.95% p.a., again for online customers only.
Here are the latest Bank of Sydney movements:
| Term | New rate | % change | Interest paid |
| 3 months | 4.95% p.a. | +1.70 | End of term |
| 6 months | 4.90% p.a. | -0.20 | End of term |
Other rate movers
- G&C Mutual Bank has cut up to 40 basis points from its term deposit rates for terms between three months and two years.
- Summerland Bank has trimmed up to 30 basis points from its rates for terms from nine months up to five years.
- BankVic has cut a total of 50 basis points off its 18-month term deposit rate to 4.00% p.a. for amounts between $5,000 and $5 million with interest paid annually or end of term.
- Bank First has cut up to 20 basis points off a range of its three-month to five-year term deposit rates, with its 1 year Regular Income products also trimmed by 10 basis points.
Advertisement
Want to earn a fixed interest rate on your cash? The table below features term deposits with some of the highest interest rates on the market for a six-month term.
Provider | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At Maturity | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | 1000 | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
| FEATURED | Personal Term Deposits - 6 months
| ||||||||||||
Disclosure | |||||||||||||
Personal Term Deposits - 6 months
Disclosure
| |||||||||||||
| At Maturity | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | 5000 | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
Term Deposit - 6 months | |||||||||||||
| At Maturity | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | 25000 | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
Term Deposit - 6 months | |||||||||||||
| At Maturity | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | 25000 | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
Term Deposit ($25,000+) - 6 months | |||||||||||||
| At Maturity | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | 5000 | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
Macquarie Bank Term Deposit (<$1,000,000) - 6 months | |||||||||||||
- Competitive interest rates on all term lengths
- Deposits covered up to $250,000 under Government's Finance Claims Scheme
- Loyalty bonus at renewal
Image by Pixabay via Pexels
Harry O'Sullivan
Denise Raward
William Jolly
