Big new term deposit rates from NAB, Aus Military Bank
The surge in term deposit rates continues with new market leading returns from Australian Military Bank and a 15 bps hike from NAB.
Australian Military Bank now has a top term deposit rate of 4.70% p.a., available for nine or ten month terms.
That's the highest short term (one year or below) TD rate in the Savings.com.au database, level with Rabobank's top five year rate - the current overall highest TD return.
Meanwhile NAB has followed Commonwealth Bank's lead and taken its top return to 4.25% p.a. for one year terms.
It's the latest in a series of big TD moves over the past few weeks as Australian banks adjust to the prospect of a prolonged period with the cash rate at or even above the current 3.60%.
While contemporary inflation numbers were within the RBA's target range in early October, the top term deposit rate in the Savings.com.au database was 4.35% p.a., and none of the big four banks offered rates above 4%.
How much could you earn with Aus Military Bank?
Australian Military Bank now offers 4.70% p.a. returns on nine, ten, or eleven month terms for deposits above $1,000 on its Investment Plus products.
For customers aged under 17, the Teen Plus product has the same rate for deposits as small as $500.
While monthly interest payments are an option, they see the rate drop to 4.60% p.a. (still higher than any other short term product in the database).
You don't need to be a member of the Australian Military to open a Aus Military Bank TD - customers can apply either in branch or online.
Here's the approximate maximum amount you could earn, assuming an eleven month term with interest paid at end of term, for various sized deposits:
| Deposit size | After 11 months you could earn... |
|---|---|
| $500 | $21.60 |
| $1,000 | $43.10 |
| $10,000 | $431.40 |
| $100,000 | $4,313.70 |
| $250,000 | $10,784.30 |
| $1,000,000 | $43,137 |
Note: Term deposit earnings are subject to income tax
Latest NAB TD rates
NAB has hiked its one year term deposit rate by 15 bps to reach its new top return of 4.25% p.a. for interest paid at the terms conclusion.
It also offers options for interest to be paid semi-annually or quarterly, but taking up that option would see the rate drop to 4.20% pa., while customers who want interest paid every month can earn up to 4.15% p.a.
Customers can open a NAB TD with a minimum deposit size of $5,000.
NAB still banking on RBA hikes?
NAB economists are still officially predicting the RBA will hike the cash rate by another 25 bps at next month's monetary policy meeting, possibly followed by another in May.
Despite softer than forecast November inflation numbers that have seen market expectations shift away from a February hike, NAB economists still feel price increases through Q4 will be enough to force the hand of the RBA.
"The pulse of underlying inflation remains stronger than is consistent with inflation at the midpoint of the RBA's target," NAB Senior Economist Taylor Nugent said.
"Given concerns about capacity constraints and resilience in the labour market, the RBA is unlikely to be confident that cyclical conditions will be exerting sufficient downward pressure on inflation."
This latest TD hike, bringing NAB's top rate level with that of Commonwealth Bank (which is also predicting a February hike), could be interpreted as the bank getting ahead of interest rates going up in the coming weeks.
However, it could also be a play for market share, with the latest APRA data showing NAB is well behind Commbank and Westpac for customer deposits (13.8% of the total Australian market compared to 20.7% for Westpac and 26.6% for Commbank).
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Want to earn a fixed interest rate on your cash? The table below features term deposits with some of the highest interest rates on the market for a six-month term.
| Bank | Term Deposit | Interest Rate | Interest Frequency | Term | Automatic Rollover | Maturity Alert | Early Withdrawal Available | Minimum Deposit | Maximum Deposit | Notice Period to Withdraw | Account Keeping Fee | Online Application | Joint Application | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.35% p.a. | At Maturity | 6 months | $5,000 | $19,999 | – | – | |||||||||||||
5.20% p.a. | At Maturity | 6 months | $10,000 | $5,000,000 | – | – | |||||||||||||
5.15% p.a. | At Maturity | 6 months | $1,000 | $1,000,000 | – | – |
