A number of banks have increased their term deposit rates recently, with some increasing by up to 50 basis points, or half a percentage point.

According to prudential regulator data, household deposit balances grew just 0.6% through the June quarter.

This slowdown could be due to a windback of government stimulus and lockdown restrictions that forced people inside and to refrain from spending money. 

In 2020, the household savings ratio reached 46-year highs off the back of tough restrictions, households tightening their purse strings, and elevated levels of Jobseeker and Jobkeeper.

In addition, Judo Bank's general manager of deposits, Patrick Nolan, pointed to why term deposit rates are getting increased.

"Over 90% of the funding raised via deposits goes directly into lending to support Australian SMEs," Mr Nolan told Savings.com.au.

"Since launch Judo has remained committed to having highly competitive deposit pricing."

Judo Bank increases term deposit rates

There were a total of nine term deposit rate increases by Judo, ranging from 4 to 5 basis points.

This includes its 3-month Personal Term Deposit, which increased by four basis points, to an interest rate of 0.90% p.a.

The 9-month Personal Term Deposit rate increased by five basis points, with a 0.95% p.a. interest rate.

The Mutual Bank also increases rates

The Mutual Bank increased term deposit rates by 35 basis points on three term deposits.

The bank increased rates on its 36-month term deposits, from 0.70% p.a. to 0.80% p.a., each with a different payment frequency.

  • 36-month Term Deposit: 0.80% p.a. for $1,000 to $4,999.99 deposit - paid annually
  • 36-month Term Deposit: 0.75% p.a. for $1,000 to $4,999.99 deposit - paid semi-annually
  • 36-month Term Deposit: 0.70% p.a. for $1,000 to $4,999.99 deposit - paid monthly

Qudos Bank rate changes

Qudos increased rates on several of its term deposits.

Four term deposit products experienced a hike in interest rates, up to 0.65% p.a., by 10 basis points.

  • 1-year Term Deposit: 0.65% p.a., paid annually ($5,000 to $9,999.99 deposit)
  • 1-year Term Deposit: 0.65% p.a., paid annually ($10,000 to $99,999,999.99 deposit)
  • 1-year Term Deposit: 0.65% p.a., paid monthly ($5,000 to $9,999.99 deposit)
  • 1-year Term Deposit: 0.65% p.a., paid monthly ($10,000 to $99,999,999.99 deposit)

Other notable changes include increases from both AMP and Newcastle Permanent.

Photo by Vladislav Babienko on Unsplash