The new top TD rate at both brands of the merged entity is 4.50% p.a. for a one year term with interest paid at the term's conclusion, representing a 0.40% increase.

That's the highest rate of any product in the Savings.com.au database, beating out Judo and Heartland Bank which both offer 4.45% p.a. (also for one year terms).

However, don't be surprised to see further upward movements in the next few days.

For G&C and Unity, nine month returns were also boosted, up 20 bps to 4.45% p.a. which is the highest nine month rate available per Savings.com.au's market research.

The merged outfit - now Australia's 10th-largest mutual bank - also continue to offer 4.40% p.a. for six and three month terms, making its product range arguably the most attractive in Australia right now.

They also have a $1,000 minimum deposit, which is lower than the more-common $5,000 found at many other banks.

How much could you earn?

Here's how much interest you could earn by depositing various amounts at G&C or Unity Bank for the next year, subject to income tax:

Deposit sizeAfter one year you could earn...
$1,000$45
$10,000$450
$100,000$4,500
$1,000,000$45,000

Term deposit rates to keep on climbing?

The news comes the day after Commonwealth Bank and NAB announced their economics teams have officially revised their cash rate predictions, now both tipping a rate hike in February next year.

Inflation has proven more persistent than the RBA and most economists were expecting, while household spending is also picking up and the unemployment rate is still just 4.3%.

RBA Governor Michele Bullock said after the December monetary policy decision that as it stands, cuts in 2026 appear unlikely, and acknowledged the possibility rates may have to come up if price increases don't slow.

"If inflation continues to be persistent and looks like it is not coming back down towards the Board's target...the Board might have to consider whether or not it's appropriate to keep interest rates where they are or in fact at some point raise them," Ms Bullock told media.

For term deposit fans, the cash rate staying at 3.60% or even 3.85% throughout 2026 could mean another surge in TD returns.

The cash rate is an important part of banks' cost of funding (it's the rate banks pay on interbank lending, and earn on balances held by the RBA), so the future of the cash rate tends to be priced in to term deposit rates.

It also tends to make other wholesale sources of funding more expensive, so banks offer more attractive retail TD rates to boost deposit books ahead of any further rate increases.

As a guide, the cash rate in May 2023 was 3.85% and the average six month term deposit rate (per RBA data) was 3.40% p.a. - as of November the average six month rate was 2.95% p.a.

More hikes were widely expected at that stage and two more did follow, so there may not be a return to the days when the top term deposit returns well exceeded 5% p.a., but Commonwealth Bank's economists believe there's a chance the RBA may be forced to hike more than just once next year.

"It could take an additional hike to bring the economy back into balance and inflation back to the mid-point [of the 2-3% target]," CommBank Head of Australian Economics Belinda Allen said.

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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.

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BankTerm DepositInterest Rate Interest Frequency Term Automatic Rollover Maturity Alert Early Withdrawal Available Minimum Deposit Maximum Deposit Notice Period to Withdraw Online Application Joint Application TagsFeaturesLinkComparePromoted ProductDisclosure
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
–
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