After Bank of Sydney and ME broke the 5% threshold last week, this week saw several competitors follow suit.

Not to be outdone, both returned serve, ME consolidating its position as the market leaders for one year terms while Bank of Sydney were the first to break the 5% p.a threshold for six months.

NAB, Judo, Suncorp and BOQ were among many other providers who hiked up term deposit rates this week, with a broad consensus that Australia can expect at least one more increase to the cash rate.

If you're a saver looking to take advantage while rates are high, it's worth remembering that term deposit rates are fixed, so even if the RBA lowers rates during your term, your interest payments won't change, unlike savings accounts.

However there are penalties and other considerations when breaking a term deposit early.

It's close to a decade since term deposit rates have been this high, so there's a big opportunity for those looking to lock in a guaranteed return on their savings.

ME increases rates by up to 85 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Four months $5,000-$2,000,000 Monthly 4.45% p.a (+0.85)
Seven months $5,000-$2,000,000 End of term 4.90% p.a (+0.15)
Nine months $5,000-$2,000,000 End of term 5.00% p.a (+0.55)
One year $5,000-$2,000,000 End of term 5.05% p.a (+0.05)
One year $5,000-$2,000,000 Monthly 5.00% p.a (+0.05)

ME moved this week to once again establish itself as a market leader for one year term deposits.

The bank moved the top rate up by another 5 basis points to 5.05% p.a, the highest available in Australia per Savings.com.au's market research, and also moved the equivalent product with monthly interest payments up to 5% p.a.

ME also became the first provider to offer a 5% p.a return on nine month term deposit products this week.

Bank of Sydney increases rates by up to 25 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Three months $1,000-$500,000 End of term 4.80% p.a (+0.15)
Five months $1,000-$500,000 End of term 4.85% p.a (+0.1)
Six months $1,000-$500,000 End of term 5.05% p.a (+0.25)

While ME moved slightly ahead for one year terms, Bank of Sydney elected to consolidate its position as the market leader for six month terms.

A 25 basis point increase means Bank of Sydney customers can earn a 5.05% p.a return when they put their money away for six months, the highest available in Australia (according to Savings.com.au market research).

The bank also increased rates on three month and five month terms, to rates that were market leading for one year terms only a few weeks ago.

Judo increases rates by up to 30 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Three months $1,000-$999,999 End of term 4.70% p.a (+0.3)
Six months $1,000-$999,999 End of term 4.95% p.a (+0.2)
Nine months $1,000-$999,999 End of term 5.00% p.a (+0.2)
One year $1,000-$999,999 End of term 5.05% p.a (+0.15)
Two-Five years $1,000-$999,999 End of term 5.05% p.a (+0.15)

Judo Bank has been among the major players for term deposit returns during the high rate period, and moved rates up this week in two installments to reestablish itself.

Judo now offers the same market leading 5.05% p.a rate on one year terms as ME, and is also just five basis points shy of Bank of Sydney for six month terms.

These products are also available with monthly/annual returns with a slight discount.

BOQ increases rates by up to 45 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Six/Seven months $5,000-$250,000 End of term 4.80% p.a (+0.2)
Nine/Ten months $5,000-$250,000 End of term 4.90% p.a (+0.45)
One year-Two years $5,000-$250,000 End of term 5.00% p.a (+0.2)

BOQ were the latest provider to break the 5% p.a threshold for one year terms with a 20 basis point increase.

The Bank of Queensland also offers a top rate of 5.50% p.a on its savings accounts.

NAB increases rates by up to 35 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Eight/Nine months $5,000-$1,999,999 End of term 4.00% p.a (+0.35)

The only one of the big four to move term deposit rates this week was NAB, which increased rates on eight or nine month term deposit accounts by 35 basis points, reaching 4% p.a.

Firstmac increases rates by up to 50 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Three months $5,000-$5,000,000 End of term 4.75% p.a (+0.2)
Six months $5,000-$5,000,000 End of term 4.90% p.a (+0.15)
One year $5,000-$5,000,000 End of term 5.00% p.a (+0.15)

Firstmac was another to crack the 5% mark this week with a 15 basis point increase to one year term deposit rates.

Six month products also received a 15 basis point increase to sit at 4.90% p.a.

This would have been a market leading rate last week, but now sits behind Judo and Bank of Sydney after this weeks increases.

AMP increases rates by up to 35 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Six months $5,000-$24,999.99 End of term 4.70% p.a (+0.05)
Six months $25,000-$5,000,000 End of term 4.75% p.a (+0.05)
One year $5,000-$24,999.99 End of term 4.95% p.a (+0.2)
One year $25,000-$5,000,000 End of term 5.00% p.a (+0.2)
Two years $5,000-$24,999.99 Annually 4.90% p.a (+0.35)
Two years $25,000-$5,000,000 Annually 4.95% p.a (+0.35)

ING increases rates by up to 55 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Three months $10,000-$5,000,000 End of term 4.60% p.a (+0.55)
Six months $10,000-$5,000,000 End of term 4.80% p.a (+0.1)
One year $10,000-$5,000,000 End of term 5.00% p.a (+0.25)

Other movers

  • Suncorp increased rates by up to 20 basis points
  • People's Choice increased rates by up to 70 basis poitns
  • Arab Bank Australia increased rates by up to 10 basis points
  • Heritage Bank increased rates by up to 70 basis points
  • Great Southern Bank increased rates by up to 45 basis points
  • My State varies rates by up to 20 basis points
  • Community First Bank increased rates by up to 75 basis points
  • Horizon increased rates by up to 50 basis points
  • Illawarra Credit Union increased rates by up to 25 basis points
  • Northern Inland Credit Union increased rates by up to 25 basis points
  • Macquarie increased rates by up to 20 basis points
  • Regional Australia Bank increased rates by up to 85 basis points
  • Beyond Bank increased rates by up to 25 basis points
  • The Mac increased rates by up to 100 basis points

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