ANZ cuts market-leading term deposit rate as big four banks align
ANZ has cut its top term deposit rate, bringing its pricing back into line with its big four peers after previously offering the standout 12-month rate among the majors.
- ANZ cuts its headline 12-month term deposit rate by 10 basis points to 5.15% p.a.
- The move brings ANZ's 12-month rate into line with the other big four banks.
- ANZ also reduced several other term deposit products, including a 160 basis point cut to its six-month term.
The bank's 12-month Advance Notice term deposit, with interest paid at maturity, now pays 5.15% p.a. - down 10 basis points (-0.10%) from 5.25% p.a.
ANZ also reduced several other term deposit products, including a 160 basis point cut to its six-month term.
This comes just over two weeks after ANZ and CommBank slashed their headline 12-month term deposit rates.
Other Advance Notice 12-month term deposits with more frequent payments were also put on the chopping block this week.
Current rates of ANZ's 12-month term deposits
Term length | New rate (change %) | Balance amount | Interest paid |
12 months | 5.15% p.a. (-0.10) | $5,000 - $1,999,999 | Annually |
12 months | 5.09% p.a. (-0.09) | $5,000 - $1,999,999 | Semi-annually |
12 months | 5.05% p.a. (-0.10) | $5,000 - $1,999,999 | Quarterly |
12 months | 5.03% p.a. (-0.10) | $5,000 - $1,999,999 | Monthly |
Prior to this, ANZ held the lead among the big four banks
The latest round of cuts now puts ANZ on par with the other three, all of which offer 5.15% p.a. for 12-month terms.
Both ANZ and NAB offer the rate on deposits of at least $5,000 and up to $2 million without additional conditions.
Customers of CommBank and Westpac, on the other hand, can get the headline 12-month term deposit rate under certain conditions.
See also: Best term deposit rates of big 4 banks
Compare the best term deposit rates of the big four
Bank (term) | Best rate | Balance amount | Interest paid | Conditions |
CommBank (12 months) | 5.15% p.a. | $5,000 - $5,000,000 | Annually | Special offer on TD opened or renewed by personal and SMSF customers only |
Westpac (12 months) | 5.15% p.a. | $5,000 - $2,000,000 | Monthly or at maturity | Includes 0.10% bonus for existing customers opening or renewing online only |
NAB (12 months) | 5.15% p.a. | $5,000 - $1,999,999 | At maturity | |
ANZ (12 months) | 5.15% p.a. | $5,000 - $1,999,999 | At maturity |
In addition to its headline rate, ANZ also trimmed its other term deposit products by as much as 160 basis points.
Interest paid on its 6-month term is now 3.50% p.a. (-1.60%), paid at maturity.
While the 5-, 6-, and 12-month term deposit rates were slashed, ANZ gave its 7-month deposit a big boost, bringing its rate up to 5.00% p.a., up 145 basis points (+1.45%).
Interest is paid at maturity, with a minimum deposit of $5,000.
Term deposit rates head down amid cash rate hike call
Rising term deposit rates can signal expectations that interest rates will remain higher for longer.
ANZ's decision to cut several term deposit rates appears at odds with its own forecast for another RBA rate hike in November.
However, deposit pricing is not solely driven by cash rate expectations as banks also adjust rates based on funding needs and wholesale funding costs.
Earlier this week, Macquarie announced it would remove the welcome rate on its savings account while increasing rates on its digital term deposit products.
See also:
- Macquarie to end welcome rate on popular savings account
- Macquarie lifts 12-month term deposit rate above the big 4
Last week, ANZ announced it's now expecting the RBA to deliver another cash rate hike in November on the back of hotter-than-expected inflation figures.
CommBank also tips a November hike, while NAB expects the next increase to come as early as September.
Westpac is still holding its view of no further rate hike, although it said the recent National Accounts data would add to the Board's "unease" ahead of its meeting on 28-29 September.
June quarter National Accounts data released earlier this week revealed the Australian economy expanded 2.1% over the year, higher than market and RBA expectations.
Per capita GDP, on the other hand, flatlined during the three-month period.
See also: Wages rise, but Australians continue to save rather than spend
"[The] result suggests the economy is slowing but running a touch firmer than expected by the RBA (1.9%yr in their latest SoMP)," Westpac economists said.
"With the second half likely to feature more noise from external disruptions and further shifts in various 'crosswinds', pinpointing the pace of underlying trends will remain challenging."
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