It seems a formality that the coming weeks will see further upward movement to the market leading term deposit rate, particularly given RBA boss Michele Bullock's remarks earlier this week.

At the Australian Business Economists (ABE) annual dinner in Sydney, Ms Bullock said inflation in Australia was now predominantly demand driven, which she implied could make further rate hikes necessary.

"A more substantial monetary policy tightening is the right response to inflation that results from aggregate demand exceeding the economy’s potential to meet that demand," she said.

NAB economists now are predicting the RBA will rates once again in February, which, presuming another 25 basis point increase, would take the cash rate to 4.60%.

If that happens, Australia might see rates reaching or even exceeding the 5.50% p.a that was briefly on offer at Bank of Sydney earlier in the year.

Judo ups rates 5 bps

Term Length Deposit size Payment frequency Interest rate (Percentage point change)
Nine months $1,000-$999,999 End of term 5.15% p.a (+0.05)
One year $1,000-$999,999 End of term 5.30% p.a (+0.05)
Two-Five years $1,000-$999,999 End of term 5.30% p.a (+0.05)

With an increase of just 5 basis points, Judo pulled level with ING for one year term deposits at 5.30% p.a.

There are now three banks on 5.30% p.a. for one year terms, but Judo is unique in that it also offers this rate for terms ranging from two to five years.

Someone who locked in a five year term deposit with Judo at 5.30%, depositing say $100,000, would receive $26,500 at the term's conclusion.

For those who prefer more regular interest payments, Judo also has products with annual or monthly income, although these come with slightly discounted rates.

G&C Mutual increases rates 55 bps

Term Length Deposit size Payment frequency Interest rate (Percentage point change)
Three years $1,000-$99,999,999.99 Annually 5.30% p.a (+0.55)
Three years $1,000-$99,999,999.99 Monthly 5.25% p.a (+0.55)

In an interesting move, G&C Mutual also hit the 5.30% p.a mark, but for three year terms.

A one year term deposit with G&C currently returns 5.00% p.a for end of term interest payments, or 4.95% p.a for monthly returns.

Where G&C Mutual particularly stands out is its maximum: the bank will allow deposits up to $100 million, a couple of orders of magnitude above the likes of Judo and Bank of Sydney.

For any readers with a few million to throw into a term deposit, G&C Mutual is where to look at the moment.

ANZ increases Advance Notice rates up to 30 bps

Term Length Deposit size Payment frequency Interest rate (Percentage point change)
12-23 months $5,000-$99,999.99 End of term 5.05% p.a (+0.30)
12-23 months $5,000-$99,999.99 Monthly 4.94% p.a (+0.29)

ANZ upped rates on its Advance Notice term deposit accounts, with an upper rate of 5.05% p.a, level with CommBank's special offer term deposit as the highest return available at the big four.

Customers can only make an early withdrawal if they give at least 31 days' notice of their intention to do so, and will be charged $30 and sacrifice a proportional amount of interest.

Bank of Sydney increases rates up to 130 bps

Term Length Deposit size Payment frequency Interest rate (Percentage point change)
Seven months $1,000-$1,000,000 End of term 5.05% p.a (+1.05)
Ten months $1,000-$1,000,000 End of term 5.10% p.a (+1.10)
One year $1,000-$1,000,000 End of term 5.30% p.a (+0.05)
13 months $1,000-$1,000,000 End of term 5.30% p.a (+1.30)

Bank of Sydney made several big changes this week, bumping up all rates above six months to 5% p.a and beyond.

The rates are the same in the 12 month space for both business and personal accounts, though business accounts saw much bigger increases.

The headline was for one year term deposits, where returns are now 5.30%, level with Judo and ING.

It's been a wild ride for rates at Bank of Sydney over the past few months, rising to 5.50% p.a for one year terms before dropping all the way back to 4.00% p.a, then climbing once again.

If this is anything to go by, don't be surprised to see Bank of Sydney push rates up further in the coming weeks.

BOQ increases rates up to 25 bps

Term Length Deposit size Payment frequency Interest rate (Percentage point change)
Six months $5,000-$250,000 End of term 5.05% p.a (+0.25)
Nine months $5,000-$250,000 End of term 5.05% p.a (+0.15)
One year $5,000-$250,000 End of term 5.10% p.a (+0.20)

The Bank of Queensland upped rates this week, taking its premier products all above the coveted 5% p.a threshold.

BOQ is still 20 basis points off the market leaders for one year term deposits.

Gateway Bank increases rates up to 25 bps

Term Length Deposit size Payment frequency Interest rate (Percentage point change)
Three months $1,000-$500,001 End of term 4.70% p.a (+0.15)
Six months $1,000-$500,001 End of term 4.95% p.a (+0.15)
One year $1,000-$500,001 End of term 5.20% p.a (+0.25)

Firstmac increases rates up to 10 bps

Term Length Deposit size Payment frequency Interest rate (Percentage point change)
Three months $5,000-$5,000,000 End of term 4.90% p.a (+0.05)
Six months $5,000-$5,000,000 End of term 5.15% p.a (+0.10)
One year $5,000-$5,000,000 End of term 5.15% p.a (+0.10)

Other movers

  • UniBank varied rates up to 290 bps
  • Australian Unity increased rates 20 bps
  • Teachers Mutual Bank varied rates up to 290 bps
  • Qudos Bank increased rates by 25 bps
  • MOVE increased rates by up to 35 bps
  • ME increased rates up to 20 bps
  • Beyond Bank increased rates up to 15 bps
  • Greater Bank increased rates up to 30 bps
  • Newcastle Permanent increased rates up to 30 bps

Photo by Thao Le Hoang on Unsplash