While banks passing on the RBA rate increase to savings accounts and home loans will dominate the headlines, several banks also announced changes to term deposit rates this week.

AMP, BOQ and Macquarie were the biggest names to increase returns, along with several smaller lenders.

It's easy to forget that despite the growing pressure on mortgage holders, upward movement to the cash rate is a good thing if you are trying to save.

Not even a year ago, the historically low cash rate meant term deposit accounts yielded just 0.2% on average, compared to 2.7% as of February 2023.

Six and 12-month term deposit products that return well over 4% p.a are becoming more commonplace, and with most expecting the cash rate to continue rising, developments in the term deposit industry are being closely watched.

AMP increases term deposit rates by up to 70 basis points

Deposit size Payment frequency Interest rate (percentage point increase)
Six month $5,000-$24,999.99 End of term 4.10% p.a (0.2)
Six month $25,000-$99,999.99 End of term 4.15% p.a (0.2)
One year $5,000-$24,999.99 End of term 4.25% p.a (0.2)
One year $25,000-$99,999.99 End of term 4.30% p.a (0.2)

AMP are the latest bank to move all its six and twelve month term deposit rates above 4% p.a.

The biggest movements to AMP rates came to its three, four and five year terms, all of which increased by 70 basis points.

Deposits between $5,000 and $25,000 now return a 4.65% p.a rate on these products, while larger deposits return 4.70%.

BOQ increases term deposit rates by up to 30 basis points

Deposit size Payment frequency Interest rate (Percentage point increase)
Six-seven month $5,000-$250,000 End of term 4.05% p.a (0.3)
Six-seven month $5,000-$250,000 Monthly 3.95% p.a (0.3)
One-two years $5,000-$250,000 End of term 4.30% p.a (0.1)
One-two year $5,000-$250,000 Monthly 4.20% p.a (0.1)

Fresh off announcing the industry leading 5.15% p.a bonus interest rate to its Future Savers savings account, BOQ has also increased its term deposit rates.

While its range of bonus savings account rates are among the most competitive in Australia, BOQ are slightly lagging behind the term deposit market leaders.

Macquarie increases rates by up to 35 basis points

Deposit size Payment frequency Interest rate (Percentage point increase)
Six month $5,000-$1,000,000 End of term 4.15% p.a (0.2)
One year $5,000-$1,000,000 End of term 4.35% p.a (0.2)

Macquarie saw slightly larger movements in its three month (up 25 basis points to 2.75% p.a), four month (up 35 basis points to 3.75% p.a) and two year terms (up 35 basis points to 4.35% p.a)

Judo increases rates by up to 25 basis points

Deposit size Payment frequency Interest rate (Percentage point increase)
Six month $1,000-$999,999 End of term 4.25% p.a (0.1)
Six month $1,000-$999,999 Monthly 4.15% p.a (0.1)
One year $1,000-$999,999 End of term 4.50% p.a (0.05)
One year $1,000-$999,999 Monthly 4.40% p.a (0.05)

The headline in Judo's announcement was the increase to the one year term account, which brings it level with the market-leading Community First.

The 5 basis point increase, on the back of 25 more a couple of weeks ago, brings Judo bank's one year term deposit (with annual payment) to 4.5% p.a, drawing level with Community First's offering.

Judo has also made continual increases to its six month term deposit accounts, which now sit at 4.25% p.a.

Hume increases rates by up to 125 basis points

Deposit size Payment frequency Interest rate (Percentage point increase)
Six month $5,000-$99,999,999.99 End of term 3.30% p.a (1.05)
Six month $5,000-$99,999,999.99 Monthly 3.20% p.a (1.05)
One year $5,000-$99,999,999.99 End of term 4.25% p.a (0.25)
One year $5,000-$99,999,999.99 Monthly 4.30% p.a (0.2)

This week's biggest movers were Hume, increasing its six month term deposit accounts by over 100 basis points.

Despite this huge jump, these products continue to lag behind the market leaders, many of whom offer returns that exceed 4% p.a.

The one year terms offered by Hume saw smaller, but still significant increases, while its three (up 125 basis points to 3% p.a) and nine month products (up 125 basis points to 4% p.a) were other big movers.

Citi increases rates by up to 30 basis points

Deposit size Payment frequency Interest rate (Percentage point increase)
Six month $10,000-$249,999.99 End of term 4.10% p.a (0.2)
Six month $250,000-$2,000,000 End of term 4.10% p.a (0.2)
One year $10,000-$2,000,000 End of term 4.40% p.a (0.2)

The biggest movements Citi made were to its three month term deposit products, which increased by 30 basis points to reach 3.70% p.a.

Other notable movers

  • ME increase rates by up to 45 basis points, including its range of twelve month term deposit accounts which moved up 5 basis points to 4.35% p.a.
  • Bank of Sydney increased term deposit rates by up to 40 basis points, including its six month (up 20 basis points to 4.20% p.a) and one year (up 25 basis points to 4.35% p.a) terms. 

Picture by Melissa Walker Horne on Unsplash