Despite a February cash rate hike looking slightly less likely after the November inflation figures, the term deposit rate surge is showing little signs of slowing down.
This week saw another flurry of rate hikes, including a new market-topping rate from Australian Military Bank and ING significantly boosting returns across the board.
While 75% of the market now expects a hold at the February RBA meeting (per the RBA ASX rate tracker), cash rate cuts still appear a long way off, and Commonwealth Bank and NAB economists continue to predict the RBA will need to hike the cash rate at least once this year to curb inflation.
It's the most term deposit fans have had to celebrate since returns began to tumble in the second half of 2024, and the trend suggests Australia might see even higher TD rates in the coming weeks.
Read more: Will term deposit rates keep going up?
Australian Military Bank hike by up to 115 bps, including new 4.55% p.a. top rate
| Term length | Deposit size | Payment frequency | Interest rate (change) |
|---|---|---|---|
| Three months | $1,000+ | End of term | 4.30% p.a. (+1.15) |
| Four months | $1,000+ | End of term | 4.55% p.a. (+0.70) |
| Five months | $1,000+ | End of term | 4.55% p.a. (+0.45) |
| Nine months | $1,000+ | End of term | 4.45% p.a. (+0.20) |
| One year | $1,000+ | End of term | 4.55% p.a. (+0.35) |
Australian Military Bank massively hiked its TD range this week, including a 115 bps increase to three month returns.
The headline however is its one year rate, which is now 4.55% p.a. after a 35 bps boost.
That's the highest one year rate currently available in the Savings.com.au database, five bps ahead of the likes of Heartland Bank and G&C Mutual.
Aus Military Bank also now offer that 4.55% p.a. rate for four and five month terms, well above the competition.
Despite the name, customers don't need to be involved with the Australian Military - anyone can apply for that product in branch or online.
ING hike by up to 25 bps
| Term length | Deposit size | Payment frequency | Interest rate (change) |
|---|---|---|---|
| Three months | $10,000+ | End of term | 4.20% p.a. (+0.05) |
| Six months | $10,000+ | End of term | 4.40% p.a. (+0.10) |
| Nine months | $10,000+ | End of term | 4.35% p.a. (+0.05) |
| One year | $10,000+ | End of term | 4.40% p.a. (+0.10) |
Competition among the major banks is also heating up, with ING throwing the gauntlet down after Macquarie's hikes last week.
At 4.40% p.a. for six month and one year terms, ING is now the outright leader for TD rates among the ten biggest banks in Australia by customer deposits.
That's just five bps behind Heartland Bank, the outright market leader for six month terms.
Bank of Sydney, Illawarra Credit Union go to 4.5 for one year
While the thunder was stolen slightly by Aus Military Bank, Bank of Sydney and Illawarra Credit Union are the latest banks to hit 4.50% p.a. for one year terms.
Bank of Sydney hiked its rate by another 10 bps after a 0.05% increase last week, while ICU hiked its special offer rate by 30 bps to hit the 4.5% mark.
Only a couple of months ago, TD rates above 4.30% p.a. were scarce, virtually non existent in the one year space.
MOVE Bank hike by up to 40 bps
| Term length | Deposit size | Payment frequency | Interest rate (change) |
|---|---|---|---|
| Six months | $5,000+ | End of term | 4.35% p.a. (+0.05) |
| Ten months | $5,000+ | End of term | 4.30% p.a. (+0.40) |
| One year | $5,000+ | End of term | 4.45% p.a. (+0.20) |
| Two years | $5,000+ | Annually | 4.30% p.a. (+0.20) |
Other movers
- Gateway Bank hiked one year rates 0.05% to a new top rate of 4.45% p.a.
- Teachers Mutual Group hiked rates by up to 25 bps. All of its brands now offer a top rate of 4.25% p.a. for six month and one year terms.
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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 | – | – |
