This week saw many of the biggest banks in Australia increase term deposit rates, as well as a variety of regional competitors.

The headlines were stolen by ME, which moved one year terms to 5% p.a on Wednesday, only to be joined by Bank of Sydney on Friday.

With most economists now anticipating one more cash rate increase at minimum, it seems inevitable more providers will hit this threshold in the coming weeks.

ANZ increases advance notice rates by 40 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Four-Five months $5,000-$99,999.99 End of term 4.20% p.a (+0.4)
Four-Five months $5,000-$99,999.99 Quarterly 4.19% p.a (+0.4)
Four-Five months $5,000-$99,999.99 Monthly 4.18% p.a (+0.4)

After hiking up rates on one year advance notice term deposits last week, ANZ followed up with a 40 basis point increase to four/five month terms.

Advance notice just means you'll need to give at least 31 days' notice before withdrawing your money before the end of the loan term.

Bank of Sydney increases rates by up to 30 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Three months $1,000-$500,000 End of term 4.65% p.a (+0.3)
Six months $1,000-$500,000 End of term 4.80% p.a (+0.1)
Nine months $1,000-$500,000 End of term 4.85% p.a (+0.15)
One year $1,000-$500,000 End of term 5.00% p.a (+0.25)

Bank of Sydney's moves this week means it now offers a market leading rate for three months and six months, and equal-first in the one year space, according to Savings.com.au's market research, excluding conditional products and special offers.

The bank leapfrogs Firstmac, which offers a 4.75% p.a return on six month products, and draws level with ME, which announced it would move to 5% p.a for one year terms earlier in the week.

ME increases rates by up to 25 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
One year-18 months $5,000-$2,000,000 End of term 5.00% p.a (+0.25)
One year-18 months $5,000-$2,000,000 Annually 5.00% p.a (+0.25)
One year-18 months $5,000-$2,000,000 Monthly 4.95% p.a (+0.25)

ME, a subsidiary of Bank of Queensland, beat Bank of Sydney to the punch by two days in offering an ongoing one year term deposit rate beginning with a 5.

Transport Mutual increases special offer rates by up to 25 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Six months $1,000-$99,999,999 End of term 5.00% p.a (+0.2)
One year $1,000-$99,999,999 End of term 5.25% p.a (+0.25)

The special offer rates available at Transport Mutual are the highest available in Australia for both six month and one year terms.

This offer applies exclusively to new customers, who need to submit an application via email.

Commonwealth Bank increases special offer rates by up to 25 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Seven months $5,000-$1,999,999 End of term 4.00% p.a (+0.25)
Twelve months $5,000-$1,999,999 End of term 4.55% p.a (+0.2)
Twelve months $5,000-$1,999,999 Monthly 4.45% p.a (+0.2)
Eighteen months $5,000-$1,999,999 End of term 4.55% p.a (+0.2)

Australia's largest bank moved rates on its special offer term deposits, for seven, twelve and eighteen month terms.

These special offers are only available to customers with existing personal or SMSF accounts, which money needs to be transferred to the term deposit account from.

With this latest increase, CBA are now just 5 basis points away from Westpac and ANZ in the one year space, but all of the big four continue to lag behind the likes of Bank of Sydney and other regional providers who are prioritising high term deposit rates.

Bendigo Bank increases rates by up to 230 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Two months $5,000-$5,000,000 End of term 1.90% p.a (+1.3)
Three months $5,000-$5,000,000 End of term 3.00% p.a (+2.3)
Six months $5,000-$5,000,000 End of term 4.05% p.a (+0.2)

Although rates remain well below the market leaders, Bendigo's movements this week were notable for some huge increases, particularly to shorter terms.

Three month term deposit rates are up from 0.70% p.a to 3.00% p.a.

Compared to the 4.65% p.a offered by Bank of Sydney though, Bendigo has a way to go before it mixes with the top dogs.

BOQ increases rates by 25 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Four-Five months $5,000-$250,000 End of term 4.40% p.a (+0.25)
Six-Seven months $5,000-$250,000 End of term 4.60% p.a (+0.25)
One-Two years $5,000-$250,000 End of term 4.80% p.a (+0.25)

BOQ kept it simple, passing on the 25 basis point cash rate increase to its premier investment term deposit products.

NAB increases rates by up to 60 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
One year $5,000-$1,999,999 Annually 4.60% p.a (+0.4)
One year $5,000-$1,999,999 Semi Annually 4.55% p.a (+0.4)
One year $5,000-$1,999,999 Monthly 4.50% p.a (+0.4)

NAB moved this week to join Westpac and ANZ in offering 4.60% p.a returns on one year term deposits.

NAB Chief Economist Alan Oster predicts the cash rate will peak at 4.60%, and a 40 basis point term deposit increase is in line with expectations of a prolonged period of high rates.

Suncorp increases rates by up to 30 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Seven months $5,000-$2,000,000 End of term 4.60% p.a (+0.3)
One year $5,000-$2,000,000 End of term 4.55% p.a (+0.3)
One year $5,000-$2,000,000 Monthly 4.50% p.a (+0.3)

Other movers

  • AMP increased rates by up to 45 basis points
  • Newcastle Permanent increased rates by up to 40 basis points
  • Greater Bank increased rates by up to 30 basis points
  • The Mutual Bank increased rates by up to 80 basis points
  • My State increased rates by up to 230 basis points
  • Bank First increased rates by up to 20 basis points
  • Bankwest increased rates by up to 95 basis points
  • Australian Mutual Bank increased rates by up to 25 basis points
  • Australian Unity increased rates by up to 50 basis points
  • Hume increased rates by up to 35 basis points
  • Firstmac increased rates by up to 20 basis points
  • Arab Bank Australia increased rates by up to 80 basis points
  • Australian Military Bank increased rates by up to 25 basis points
  • Qudos increased rates by up to 25 basis points

Picture by Zan on Unsplash