While Michele Bullock said after last week's monetary policy decision rate cuts this year are likely not on the agenda, many Aussies are seemingly unconvinced.
As of 14 August, markets were estimating a 50% probability of a cut to 4.10% at the very next RBA meeting in September.
And if you're using term deposit rates as a barometer, you would also probably be getting a strong feeling that cuts are in the air after this latest round of rate cuts.
This weekend, please take a moment to think of the term deposit enthusiasts out there, who will doubtless be mourning the loss of the market leading rates for six month, one year and five year terms.
Heartland Bank cuts rates up to 20 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Six months | $25,000-$1,000,000 | End of term | 5.15% p.a (-0.15) |
| One year | $25,000-$1,000,000 | End of term | 5.10% p.a (-0.20) |
It was good while it lasted.
For months now, Heartland Bank has been the reference point for the very top end of the TD market, but this latest round of cuts means it relinquishes its status for six month terms.
G&C Mutual Bank continue to offer a rate of 5.20% p.a on six month terms, while there are also a host of other providers that also offer 5.10% p.a on one year TDs.
When you consider that the mission statement of Heartland is to offer products that are the 'best of their kind', these cuts don't bode well for the direction of TD rates in the coming weeks.
CommBank varies rates up to 60 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $5,000-$49,999.99 | End of term | 3.20% p.a (-0.25) |
| Six months | $5,000-$49,999.99 | End of term | 3.45% p.a (-0.25) |
| Nine months | $5,000-$49,999.99 | End of term | 4.50% p.a (+0.55) |
| One year | $5,000-$49,999.99 | End of term | 4.00% p.a (-0.60) |
There were widespread cuts across the TD range at Australia's biggest bank, although nine month terms received a tidy boost.
On three month, six month and one year terms, there's an extra 5 basis points available for deposits larger than $50,000.
Whatever size your deposit though, TD rates at CommBank across the board are far below the top end of the market - for six month terms for example, Heartland remains 1.65% ahead despite the cuts this week.
Judo cuts one year rates 5 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| One year | $1,000-$2,000,000 | End of term | 5.05% p.a (-0.05) |
| One year | $1,000-$2,000,000 | Monthly | 4.95% p.a (-0.05) |
Judo cut one year rates in more disheartening news those who follow the term deposit market.
Fans will be hoping isn't a sign of further cuts to come across Judo's other TD products.
For now, Judo's market leading three month rate (5.00% p.a) remains intact, as well as the competitive 5.10% p.a on six month and nine month terms.
Given the way the market is trending though, if you're looking to lock in one of these rates the safest move might be to do so sooner rather than later.
RaboBank cuts rates up to 50 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Six months | $1,000-$2,000,000 | End of term | 4.80% p.a (-0.20) |
| One year | $1,000-$2,000,000 | End of term | 4.60% p.a (-0.40) |
| Two/Three years | $1,000-$2,000,000 | Annually | 4.25% p.a (-0.25) |
| Five years | $1,000-$2,000,000 | Annually | 4.60% p.a (-0.50) |
If you thought things couldn't get any worse, RaboBank also got rid of its market leading rate for five year terms this week.
For a while, Rabo offered a return of 5.10% p.a on five year terms, which as long term fixed investments go is almost as appealing as it gets.
That meant for example, a $510 annual return on a $10,000 investment for five years, but this cut drops that down to $460 each year before taxes.
MOVE Bank varies rates up to 20 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $5,000-$2,000,000 | End of term | 4.85% p.a (-0.05) |
| Six months | $5,000-$2,000,000 | End of term | 5.00% p.a (-0.20) |
| Nine months | $5,000-$2,000,000 | End of term | 5.05% p.a (-0.15) |
| Eleven months | $5,000-$2,000,000 | End of term | 5.10% p.a (+0.10) |
| One year | $5,000-$2,000,000 | End of term | 5.00% p.a (-0.10) |
Other movers
- The Mac increased rates up to 70 bps
- BankWest cut rates up to 40 bps
- CreditUnionSA varied rates up to 90 bps
- BCU and Great Southern Bank cut rates by 15 bps
- Bank Australia cut rates up to 45 bps
- Bank of Sydney cut rates up to 85 bps
Picture from Commonwealth Bank
Denise Raward
Harry O'Sullivan
Jacob Cocciolone
Staff Writers
