On Tuesday, the RBA confirmed that the cash rate will be kept on hold at 4.35% again for at least another six weeks, with the next meeting to be held over 18-19 March.

As of8 February, market expectations of a cut in March were 21%, so while more rate pauses continue to be the likeliest outcome for the next few months, sentiment looks to be shifting.

As expected, Governor Michele Bullock warned further rate hikes are not off the table, but economists like Luci Ellis, Westpac chief economist and former RBA assistant governor, say the likelihood is the next movement will be down.

"The case to raise the rate from here is steadily losing traction," Ms Ellis said.

"We expect that the Reserve Bank will start to see inflation come down enough that they have enough comfort and enough reassurance that they'll see inflation return to their 2-3% target band on the timetable they want to see.

"We expect that level of comfort will be reached about September, and that they might cut rates a couple of times towards the end of this year."

Those secretly holding out hope for more rate hikes, and a return to the highs of last year when the top term deposit rates briefly hit 5.50% p.a, look increasingly likely to be disappointed.

However, while the likes of AMP, NAB and BOQ did cut TD rates this week, there were still some notable increases from Westpac and ANZ.

Westpac increases special offer rates up to 93 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Eight months $5,000-$2,000,000 End of term/Monthly 4.78% p.a (+0.93)
11 months $5,000-$2,000,000 End of term/Monthly 4.70% p.a (+0.70)

Despite its lead economist forecasting no more rate hikes, Australia's second largest bank announced that for a limited time from 8 February, existing customers could earn a special boosted rate on eight month and 11 month term deposits.

For customers who open or renew online, an additional 0.10% p.a bonus rate applies, which would take eight month rates to 4.88% p.a, level with the equivalent offer at CommBank.

These largely mirror movements seen from Westpac subsidiaries last week, including St George, Bank of Melbourne, and BankSA.

Westpac's special rates require a minimum of 31 days' notice before withdrawal, except in hardship cases, which is the norm for many term deposits.

Westpac standard term deposit rates peak at 4.35% p.a for 12 months (including that extra 10 bps), so anyone who qualifies might look to take advantage of the special offer while it is available to earn the higher rate.

After eight months, a $10,000 deposit would return - before tax - about $320.80 in interest at the 4.88% p.a. rate, while the equivalent period would return about $286 at 4.35% p.a.

Judo cuts rates by a further 5 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Three months $1,000-$999,999 End of term 4.85% p.a (-0.05)
Six months $1,000-$999,999 End of term 4.95% p.a (-0.05)
Nine months $1,000-$999,999 End of term 5.00% p.a (-0.05)
One year $1,000-$999,999 End of term 5.00% p.a (-0.05)

Another week, another rate cut from Judo, bringing its top rate down to 5.00% p.a, compared to 5.35% p.a at the back end of last year.

After the cut from Challenger Bank, Judo remains 20 basis points behind the market leading rate of 5.20% p.a.

Challenger Bank cuts market leading rate by 5 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
One year $5,000*-$1,000,000 End of term 5.20% p.a (-0.05)

*$25,000 for customers new to Challenger

Since last week's TD wrap, Challenger Bank has slightly cut back its market leading rate on one year term deposits.

It is now level with what's on offer at other providers like Qudos and G&C Mutual.

ANZ varies Advance Notice rates up to 63 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Eight-Nine months $5,000-$99,999.99 End of term 4.88% p.a (+0.63)
12-24 months $5,000-$99,999.99 End of term 4.62% p.a (-0.19)

Going stride for stride with Westpac, ANZ also took its maximum rate on eight month terms to 4.88% p.a.

Like the Westpac product, ANZ also require a minimum of 31 days' notice before early withdrawal for these higher rates, with a negligible 0.10% p.a return on normal TDs.

With it being Chinese New Year and the Year of the Dragon one could be forgiven for mistaking all these '8' rates as a nod to our Mandarin or Cantonese-speaking folk.

The number eight is a lucky one among Chinese people.

However ANZ economists put a stop to that train of thought earlier this week.

"We are economists. We do not promote mythical philosophy," they said.

Macquarie Bank cuts rates 5 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
One year $5,000-$1,000,000 Annually 4.70% p.a (-0.05)
Two years $5,000-$1,000,000 Annually 4.40% p.a (-0.05)

AMP cuts rates up to 75 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Nine months $5,000-$24,999 End of term 4.95% p.a (-0.05)
One year $5,000-$24,999 End of term 4.70% p.a (-0.35)
One year $25,000-$10,000,000 End of term 4.75% p.a (-0.35)
Two years $5,000-$24,999 Annually 4.15% p.a (-0.45)

AMP was another big hitter to make widespread cuts this week, applying to many of its broad range of products.

Interestingly, nine month terms now have a higher return than one year, which suggests that AMP, like many, expect rates to go down towards the end of the year.

Shane Oliver, AMP Chief Economist, expects "mid-year" rate cuts.

"By the May meeting there is a good chance [the RBA] will have moved to an easing bias," Dr Oliver said after Tuesday's decision.

However, he was another to say the road could still be a bumpy one, with the risk of supply side shocks like an escalation of the conflict in the Middle East still very real.

NAB cuts rates up to 20 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Seven months $5,000-$1,999,999 End of term 3.80% p.a (-0.20)
One year $5,000-$1,999,999 End of term 4.80% p.a (-0.10)

NAB moved in the other direction to Westpac this week on one year terms, cutting rates back to now sit below its competitor.

This is not a special offer product though, so these rates could be on offer for longer than the 4.88% p.a available at Westpac and CommBank, while it also applies to one year terms, so there is a higher ceiling for gross earnings.

Other movers

  • ME cuts rates by up to 15 bps
  • Arab Bank Australia cuts rates by 10 bps
  • BOQ cuts rates by up to 15 bps
  • Rabobank cuts rates by up to 50 bps
  • Heritage Bank varies rates by up to 70 bps, including a boost to take 6 month terms to 5.00% p.a.
  • BCU increases rates by 30 bps
  • Summerland Bank cuts rates by 5 bps
  • Bank Australia varies rates by up to 20 bps

Photo by Harrison Astbury