Despite the RBA opting to hold the cash rate steady at 4.10% at its Board's April Fools' Day policy meeting, a handful of banks proceeded to drop their rates further.
Currently, no term deposit provider is offering returns starting with a '5', with the top rate sitting at 4.95% p.a., available through Heartland Bank's 9-month term deposit.
And in the not-so-unlikely event the RBA cuts in May - particularly given its slightly dovish messaging on Tuesday - we could see these top rates fall even further.
Economists believe that despite its attempts to remain non-committal, Governor Michele Bullock and the Board are likely to cut rates again at the next meeting.
"NAB's impression was there was nothing to suggest the RBA Board won't cut in May if data comes in line or below their forecast track," said Tapas Strickland, NAB head of of markets economics.
Economists over at NAB pencil in at least three more rate cuts, which would bring the cash rate down to 3.10% by February 2026.
It's also worth noting the softening tone and reference to inflation progress in the post-meeting statement.
The line "continued decline in underlying inflation is welcome" signals that the RBA views the current inflation trajectory as in line with its most recent forecasts.
Nevertheless, in his Savings Tip Jar appearance on Tuesday, HSBC chief economist Paul Bloxham maintained his view there'd only be one more cut in 2025, and another in early 2026.
He also took the contrarian view that the messaging on Tuesday was slightly hawkish if anything - meaning the RBA might be more reluctant to cut than many think, pointing to global uncertainties.
While we await the inflation figures due out on 30 April to see if they support the May cut predictions, here are the latest term deposit rate adjustments from several notable providers:
Westpac drops term deposit rates
Westpac has made a flurry of cuts across its range of term deposit products, slashing some terms by as much as 25 basis points.
The bank's headline rate for unconditional term deposits is now offered through its 12-month term at 3.90% p.a., paid at maturity.Prior to this week's changes, the same product paid an interest rate of 4.00% p.a.
Westpac's highest term deposit rate remains available through its 11-month 'special offer' for existing customers, which pays 4.60% p.a. when opened or renewed online.
Westpac's economics team is among those forecasting further rate cuts in the near term, noting that "the most likely [timing is] in May when the RBA should be able to point to yet another surprise on inflation."
While several factors can influence Westpac's decision to adjust deposit rates, this outlook lends support to the latest reductions.
Below are the latest term deposit rates from Westpac, for products that pay interest at maturity:
| Term | New rate (change) | Deposit amount |
|---|---|---|
| 3 Months | 2.90% p.a. (−10 bps) | $5,000 - $2,000,000 |
| 6 Months | 3.30% p.a. (−10 bps) | $5,000 - $2,000,000 |
| 7 Months | 3.40% p.a. (−10 bps) | $5,000 - $2,000,000 |
| 8 Months | 3.45% p.a. (−15 bps) | $5,000 - $2,000,000 |
| 9 Months | 3.50% p.a. (−25 bps) | $5,000 - $2,000,000 |
| 12 Months | 3.90% p.a. (−10 bps) | $5,000 - $2,000,000 |
BankSA, Bank of Melbourne, St.George follow Westpac's moves
Westpac's subsidiaries - BankSA, Bank of Melbourne, and St.George - moved in lockstep with the parent bank, reducing term deposit rates by up to 25 basis points.
The term deposit products offered by these banks are largely identical to Westpac's.However, a key difference is that customers can open an account with as little as $2,000.
The maximum deposit limit is also $2 million.
Macquarie Bank cuts term deposit rates
Australia's fifth-largest bank is back on the rate-cutting board, trimming returns on its 9- and 12-month term deposits.
In typical Macquarie fashion, 5 basis points were shaved from the 9- and 12-month terms.
| Term | New rate (change) | Payment frequency |
|---|---|---|
| 9 Months | 4.30% p.a. (−5 bps) | End of term |
| 12 Months | 4.25% p.a. (−5 bps) | End of term |
The bank's highest available term deposit rate is now 4.55% p.a. for its 3-month offering, also paid at end of term.
The minimum deposit to get these rates is $5,000, the maximum is $1 million.
Suncorp Bank adjusts term deposit rates
Suncorp appears to have flipped the script on its 6- and 7-month term deposits - hiking the former by up to 110 basis points and simultaneously slashing the latter by up to 100 basis points.
Following these changes, depositors can now earn up to 4.70% p.a. by locking their funds in a 6-month term deposit.
In contrast, the longer 7-month option now returns as little as 3.70% p.a.
| Term | New rate (change) | Deposit amount |
|---|---|---|
| 6 Months | 4.70% p.a. (+110 bps) | $5,000 - $99,999.99 |
| 7 Months | 3.60% p.a. (-100 bps) | $5,000 - $99,999.99 |
| 6 Months | 4.70% p.a. (+105 bps) | $100,000 - $999,999.99 |
| 7 Months | 3.65% p.a. (-95 bps) | $100,000 - $999,999.99 |
HSBC moves term deposit rates down
HSBC joined the rate-cutting action this week, reducing the interest rates on its short- to medium-term term deposit products.
Up to 25 basis points were shaved off select term deposits, bringing some rates down to the 4.00% p.a. mark.
For example, HSBC's 6-month term deposit now pays 3.90% p.a. at maturity, down 25 basis points from last week's 4.15% p.a. offering.
Meanwhile, the shorter 3-month term deposit pays 4.00% p.a., also down 25 basis points from 4.25% p.a.
The minimum deposit is $5,000.
Other movers:
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Teachers Mutual Bank and UniBank cut term deposit rates up to 25 bps.
-
Community First Bank slashes term deposit rates by up to 30 bps; introduces a 6-mo special rate at 4.80% p.a.
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Bernadette Lunas
Harry O'Sullivan
Denise Raward
Staff Writers
William Jolly
