- CommBank has altered term deposit rates with most returns cut back.
- The top TD rate at CBA is now 4.75% p.a. for eight months, existing customers only.
- The move reinforces the position of Australia's biggest bank that the RBA will cut in February.
After Macquarie and Judo cut TD rates earlier in the week, CommBank has followed suit with cuts across its range of products.
The top rate is now 4.75% p.a. on its eight month special offer, only available to existing customers.
This comes days after the CommBank Household Spendings Insights were released for December, which suggested Australian households cut spending back by 1.8% through the month in seasonally adjusted terms.
Chief Economist Stephen Halmarick said the drop in spending combined with the improving inflation outlook supported CBA's position that the RBA will cut in February.
"The fall in household spending in December reinforces the view that the Australian consumer continues to struggle, with summer-time and holiday spending clearly brought forward to October and November to take advantage of sales activity," he said.
"We continue to hold the view that the RBA can begin to lower interest rates at their first meeting of the year...we also expect 100 basis points of monetary policy easing through 2025."
On Thursday, the Labour Force numbers for December showed unemployment ticked up to 4% to close the year - still below the projection in the most recent Statement on Monetary Policy.
Nevertheless, as of 16 January markets continue to price in a February rate cut, with a 73% chance of a decrease to 4.10% per the ASX RBA rate tracker.
Term deposit boom over?
For many mortgage holders, 18 February may still seem too far away after more than a year with the cash rate at 4.35%.
However for Australians without home loans looking to grow their savings, this period could have been lucrative as term deposit rates climbed up near 5.50% p.a.
Now rates appear to be on the way down, the TD market has come off the boil - the top rate now is 5.15% p.a. for a six month term with AMP or nine months with Heartland Bank.
Once the cash rate is cut there's a good chance these returns will be gone, so savers looking at fixed investments might feel its time to pull the trigger.
CommBank term deposit rate changes
| Term length (LVR) | Deposit size | Payment frequency | Interest rate |
|---|---|---|---|
| 8 months | $5,000 - $1,999,999 | Annually | 4.75% p.a. (-0.13) |
| 8 months | $5,000 - $49,999.99 | End of term | 4.45% p.a. (+0.85) |
| 9 months | $5,000 - $49,999.99 | End of term | 3.55% p.a. (-0.90) |
| 10 months | $5,000 - $49,999.99 | End of term | 3.65% p.a. (-0.10) |
| 11 months | $5,000 - $49,999.99 | End of term | 3.75% p.a. (-0.10) |
| 8 months | $50,000 - $1,999,999.99 | End of term | 4.45% p.a. (+0.80) |
| 9 months | $50,000 - $1,999,999.99 | End of term | 3.60% p.a. (-0.85) |
| 10 months | $50,000 - $1,999,999.99 | End of term | 3.70% p.a. (-0.10) |
| 11 months | $50,000 - $1,999,999.99 | End of term | 3.80% p.a. (-0.10) |
| 12 months | $5,000 - $49,999.99 | Annually | 4.25% p.a. (-0.10) |
| 13-17 months | $5,000 - $49,999.99 | Annually | 4.25% p.a. (-0.10) |
| 12 months | $50,000 - $1,999,999.99 | Annually | 4.30% p.a. (-0.10) |
| 13-17 months | $50,000 - $1,999,999.99 | Annually | 4.30% p.a. (-0.10) |
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| 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 | – | – |
