The RBA bringing rates down to 4.10% on 18 February is looking more and more likely after Wednesday's Q4 inflation numbers came in below expectations.
Per the ASX RBA rate tracker the chances of a 25 bps cut were 95% as of 29 January, while NAB officially changed its forecast from May to February in the aftermath of the CPI figures.
However, it's not all despair as far as term deposit rates go, with several providers announcing shock new increases this week.
MOVE Bank varies rates by up to 20 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Five months | $5,000+ | End of term | 5.00% p.a. (+0.20) |
| Seven months | $5,000+ | End of term | 4.80% p.a. (-0.15) |
| Eleven months | $5,000+ | End of term | 4.70% p.a. (-0.05) |
| One year | $5,000+ | End of term | 4.60% p.a. (-0.10) |
| Two years | $5,000+ | End of term | 4.10% p.a. (-0.20) |
Most of the rate movement from MOVE Bank was down this week, with the notable exception of its five month product.
After a 20 bps increase, a five month term deposit at MOVE Bank now returns 5.00% p.a. which is among the highest on market.
Australian Military Bank currently offers 5.10% p.a. for six month terms, but for the slightly more niche five month market MOVE Bank currently has the standout rate.
Macquarie Bank cuts rates by up to 10 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Six months | $5,000-$1,000,000 | End of term | 4.55% p.a. (-0.05) |
| Nine months | $5,000-$1,000,000 | End of term | 4.45% p.a. (-0.10) |
| One year | $5,000-$1,000,000 | End of term | 4.40% p.a. (-0.10) |
For the second week in a row, Australia's fifth largest bank has cut back its term deposit returns.
Macquarie also offers term deposits for sums greater than $1,000,000 - albeit at a discounted rate.
RACQ Bank varies rates up to 25 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $1,000-$99,999,999.99 | End of term | 4.95% p.a. (+0.10) |
| Nine months | $1,000-$99,999,999.99 | End of term | 4.40% p.a. (-0.25) |
| One year | $1,000-$99,999,999.99 | End of term | 4.40% p.a. (-0.25) |
RACQ Bank was another TD provider to offset cutting most of its rates this week by giving one product a big boost.
At 4.95% p.a. for three months, RACQ is now level with AMP Bank for deposits up to $25,000, although larger deposits at AMP can earn 5.00% p.a.
Bendigo Bank cuts one year rates 10 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| One year | $5,000-$5,000,000 | End of term | 4.40% p.a. (-0.10) |
| One year | $5,000-$5,000,000 | End of term | 4.40% p.a. (-0.10) |
Bendigo isn't the most active player in the term deposit market - the number of occasions it has featured over the past couple of years of TD wraps is probably single digits.
That 4.40% p.a. rate applies to both one year and nine months, and while fairly modest compared to elsewhere on the market, it's the highest Bendigo has to offer.
Bendigo and most of the other largest banks by household deposits don't tend to compete with players like Judo and Heartland on rates - yet the vast majority of Aussies are still choosing the majors according to APRA data.
As the Savings.com.au team and I will continue to remind everyone, bigger doesn't necessarily mean better, and the difference between earning 4.40% p.a. and say, 5.00% p.a. on a term deposit can be pretty significant.
Heartland Bank cuts rates by up to 40 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $25,000-$1,000,000 | End of term | 4.45% p.a. (-0.40) |
| Six months | $25,000-$1,000,000 | End of term | 4.99% p.a. (-0.01) |
| Two years | $25,000-$1,000,000 | End of term | 4.50% p.a. (-0.10) |
Having said the above, Heartland has once again taken the axe to its term deposit range, further cutting back several rates.
The nine month and one year rates at Heartland remain competitive, at 5.05% p.a. and 5.00% p.a. respectively.
AMP varies rates by up to 30 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $25,000-$10,000,000 | End of term | 4.90% p.a. (-0.10) |
| Five months | $25,000-$10,000,000 | End of term | 4.90% p.a. (+0.30) |
| Six months | $25,000-$10,000,000 | End of term | 4.90% p.a. (-0.25) |
| Nine months | $25,000-$10,000,000 | End of term | 4.75% p.a. (-0.30) |
| One year | $25,000-$10,000,000 | End of term | 4.75% p.a. (-0.20) |
| Two years | $25,000-$10,000,000 | End of term | 4.35% p.a. (-0.10) |
AMP Bank was the latest heavy hitter in the TD market to cut back previously market leading returns.
However, its five month rate did get a bit of a boost - 0.30% to be precise, which takes it to within 10 bps of the 5.00% p.a. mark.
Other movers
- Illawarra Credit Union hiked rates by up to 45 bps, including 4.90% p.a. for three months
- Rural Bank cut one year rates by 10 bps to a new top rate of 4.40% p.a.
- Bank of Sydney cut rates by up to 40 bps
- RaboBank cut rates by up to 20 bps
- Teachers Mutual Group hiked rates by up to 60 bps
- Newcastle Permanent and Greater Bank cut rates 10 bps
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Looking for a fixed income investment? Check out some of the top term deposits in Australia
Provider | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At Maturity | $product[$field["value"]] | $product[$field["value"]] | $product[$field["value"]] | 1000 | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
SMSF 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"]] | 1000 | $product[$field["value"]] | $product[$field["value"]] | More details | ||||||
Term Deposits - 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 | ||||||
Term Deposit - 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 | |||||||||||||
Picture by Sasun Bughdaryan on Unsplash
Denise Raward
Harry O'Sullivan
William Jolly
Jacob Cocciolone
