On Monday, both NAB and ANZ cut term deposit returns by up to 80 bps.

This follows the lead of CommBank, which last week also cut back on many of its term deposit rates, as well as some of the big hitters for TDs like Heartland Bank and Judo.

At all of the big four banks, the top TD return is now 4.80% p.a, for eight month terms at NAB and ANZ, nine months at CBA and 11 months at Westpac.

NAB term deposit rate changes

Term length Deposit size Payment frequency Interest rate (Change)
Three-Four months $5,000-$1,999,999 End of term 3.25% p.a (-0.25)
Six-Seven months $5,000-$1,999,999 End of term 3.60% p.a (-0.20)
Eight-Nine months $5,000-$1,999,999 End of term 4.80% p.a (+0.80)
One year $5,000-$1,999,999 End of term 4.50% p.a (-0.40)
Three/Four/Five years $5,000-$1,999,999 End of term 3.30% p.a (-0.50)

NAB also offers products where interest is paid more frequently, with slightly discounted rates in exchange for more regular payments.

ANZ Advance Notice term deposit rate changes

Term length Deposit size Payment frequency Interest rate (Change)
Three/Four months $5,000-$1,999,999 End of term 3.25% p.a (-0.25)
Six/Seven months $5,000-$1,999,999 End of term 3.50% p.a (-0.40)
Eight/Nine months $5,000-$1,999,999 End of term 4.80% p.a (+0.75)
One year $5,000-$1,999,999 End of term 4.50% p.a (-0.10)

The changes at ANZ mean its products are even more in line with what's on offer at NAB - for most term lengths, rates at both banks are either identical or only a few basis points apart.

These rates at ANZ are for the 'Advance Notice' products, which means customers need to give at least 31 days' notice before withdrawing funds early.

This is common across most term deposits, however ANZ gives an option without this stipulation - the rates on these are much lower.

How much can you earn?

This is how much you can expect to earn on various sized investments at 4.80% p.a for eight months:

Deposit size Return after eight months
$10,000 $320
$50,000 $1,600
$100,000 $3,200
$1,000,000 $32,000

This is before taxes - savings and term deposit interest is classed as taxable income.

At CommBank and Westpac, the top rate (4.80% p.a) is on longer terms, which means a bigger return, but your money will be locked away for longer.

The big four remain a distance from the top end of the market - G&C Mutual Bank still offers 5.20% p.a on six month terms, while Heartland Bank, G&C and several others offer 5.10% p.a for one year terms.

Shrinking TD rates point away from rate hikes?

The past couple of weeks have been a bloodbath where term deposit rates are concerned with large scale cuts throughout the market.

RBA Governor Michele Bullock maintains that further cash rate hikes are still on the table, but TD providers seemingly feel a cut is more likely despite Ms Bullock all but ruling out rates going down this year.

Three of the big four are officially predicting the cash rate to stay at 4.35% until an easing cycle begins in 2025; only CBA is holding out on a rate cut call for 2024.

The RBA ASX rate tracker, based on trading activity on cash rate futures, suggests there is a distinct probability rates could go down as early as the next monetary policy meeting in late September.

As of 16 August, market expectations were there is a 30% chance of a cut to 4.10%.

Picture from NAB