The only way continues to be up in the term deposit market, with ING and Macquarie headlining a raft of rate increases in the week past.

At the very top of the market, things have been mostly the same since G&C Mutual blasted its way to the top for 9- and 12-month terms, while Heartland has had a stranglehold on six months for a while as well.

However, the chasing pack is growing, given the short term outlook increasingly looking like Australia is some time away from cuts to the RBA cash rate.

The Q2 CPI inflation read (scheduled for 31 July) should give a clearer picture for the monetary policy decision to come, but all the talk in recent weeks has been of a delayed timeline for rate cuts, or even more hikes.

ING boosts rates up to 15 bps

Term length Deposit size Payment frequency Interest rate (Change)
Three months $10,000-$5,000,000 End of term 4.90% p.a (+0.15)
Six months $10,000-$5,000,000 End of term 5.10% p.a (+0.05)
One year $10,000-$5,000,000 End of term 5.10% p.a (+0.10)

While Heartland Bank and G&C Mutual remain out in front with the highest rates on market, competition amongst the top-10 banks is heating up.

Last week, BOQ was the headline, hiking six month TD rates to 5.10% p.a, overtaking ING as the highest rate on offer from the 10 banks in Australia with the largest customer deposits.

However, ING has hit back straight away, matching BOQ stride for stride at six months while seizing the initiative for one year.

It's worth pointing out that ING and BOQ are arguably also the two stand outs of that top ten where savings accounts are concerned, with significantly higher maximum ongoing rates than what's on offer at the other majors.

In spite of this, according to the latest data from APRA almost 73% of the total deposits from households are with the big four banks.

Macquarie boosts rates up to 15 bps

Term length Deposit size Payment frequency Interest rate (Change)
Three months $5,000-$1,000,000 End of term 4.90% p.a (+0.10)
Six months $5,000-$1,000,000 End of term 4.90% p.a (+0.10)
Nine months $5,000-$1,000,000 End of term 4.95% p.a (+0.15)
One year $5,000-$1,000,000 End of term 4.95% p.a (+0.15)

As Australia's fifth-largest bank, Macquarie also hiked this week and is now getting dangerously close to cracking the 5% barrier.

The highest TD rates at Macquarie are now above all the big four, beating out a special offer of 4.90% p.a currently available at CommBank.

Term deposit enthusiasts across the nation will be holding their breath to see whether Macquarie is about to be the next provider to drop a rate starting with that magic number 5.

Bank of Sydney hikes 15 bps

Term length Deposit size Payment frequency Interest rate (Change)
Seven months $1,000-$1,000,000 End of term 5.25% p.a (+0.15)

After a steady stream of cuts in the recent past, Bank of Sydney once again bolstered rates this week on its now premier seven month TD.

At 5.25% p.a, Bank of Sydney is just 5 bps behind Heartland at 5.30% p.a for six months, but that extra month of earnings means the same sized deposit goes further with Bank of Sydney.

Other movers

  • Beyond Bank hiked rates up to 20 bps, including a new return of 5% p.a on seven month terms.
  • The mutual banking group including Teachers Mutual and UniBank boosted rates 30 bps.
  • Bank Australia put up rates by 15 bps.
  • Geelong Bank hiked rates up to 395 bps (!) from a low base.

Picture by Ingo Stiller on Unsplash