The big news this week was the Q2 CPI, which revealed prices rose 1.0% from March through June, and 3.8% over the past 12 months.

After this release, a hold at next week's RBA monetary policy meeting looks overwhelmingly likely - priced in at a 95% chance per the ASX RBA rate tracker.

Accordingly, the TD market shifted downward slightly, with two of the major players cutting back on rates this week.

However, one of Australia's largest banks still significantly boosted returns, so it might not be time to panic yet about missing the boat on big TD rates.

Heartland cuts one year term by 5 bps

Term length Deposit size Payment frequency Interest rate (Change)
One year $25,000-$1,000,000 End of term 5.30% p.a (-0.05)

Heartland, which has led the way in the TD market in recent weeks, trimmed its premier one year product.

While still a market leading rate, it's nevertheless difficult to say goodbye to that 5.35% p.a, which stood for months.

A few weeks ago, the top rate available in Australia was 5.40% p.a. from Bank of Sydney, but as it stands with signs increasingly pointing away from further rate hikes, things look to be heading further away from those heights.

Judo cuts rates by 15 bps

Term length Deposit size Payment frequency Interest rate (Change)
Six months $1,000-$2,000,000 End of term 5.10% p.a (-0.15)
Nine months $1,000-$2,000,000 End of term 5.10% p.a (-0.15)
One year $1,000-$2,000,000 End of term 5.10% p.a (-0.15)
Two/Three/Four/Five Years $1,000-$2,000,000 End of term 4.85% p.a (-0.15)

Judo was the other big hitter to cut back on TD rates this week, cutting back its range of products by 15 bps.

Economist Warren Hogan, who is the chief economic advisor at Judo, told the Savings Tip Jar podcast back in April that he feels the cash rate may need to go up closer to 5% to get inflation back down to target, and he reaffirmed his position on twitter after the CPI numbers.

"The case for a higher cash rate is still there," he wrote.

"I still think the best chance of remaking on the narrow path is a small upward adjustment to the interest rate in the short term."

However, he also acknowledged the RBA has an excuse to "remain patient", and may well choose to do so, which may partly have informed this decision from Judo.

ING varies rates by up to 60 bps

Term length Deposit size Payment frequency Interest rate (Change)
Three months $10,000-$5,000,000 End of term 4.85% p.a (-0.05)
Eleven months $10,000-$5,000,000 End of term 5.20% p.a (+0.60)
One year $10,000-$5,000,000 End of term 5.05% p.a (-0.05)
Two years $10,000-$5,000,000 End of term 4.75% p.a (+0.15)

ING bucked the trend this week, with a major boost to 11 month terms taking the top rate to 5.20% p.a.

This is the highest rate available at any of the top 10 biggest banks in Australia by customer deposits, 0.10% ahead of Macquarie whiich currently offers 5.10% p.a on one year TDs.

However, the same size deposit would net you a better return at Macquarie, with the extra month of earning.

Other movers

  • BCU varies rates up to 160 bps
  • BankVic boosts rates 15 bps

Picture by Inigo Stiller on Unsplash