Macquarie lifts 12-month term deposit rate above the big 4
- Macquarie Bank is lifting rates on its digital term deposit products
- The changes come on the same day the bank announced changes to its popular savings account
- Macquarie's new term deposit rates are higher than corresponding rates of the big four but require higher deposits to achieve them
Macquarie Bank is boosting rates on its new digital term deposits by up to 20 basis points, taking its highest rate to 5.30% p.a. for a 12-month deposit of at least $25,000.
It leapfrogs the best 12-month rates of its big four rivals and comes on the same day Macquarie announced it was ending the four-month welcome rate on its savings account from 14 September.
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The move to scrap the welcome rate, currently 5.35% p.a. on the first $250,000, is likely free up bank funds that can be used to sweeten Macquarie's term deposit offerings, a segment of the deposit market Macquarie has made no secret of wanting to grow.
Macquarie launched its new digital term deposits in July, for three-, six-, nine- and 12-month terms for minimum deposits of $25,000 with relatively modest rates at the time.
The new rates are more competitive but require larger deposits:
| Term | New rate | Change (%) | Balance | Interest paid |
| 3 months | 5.05% p.a. | +0.05 | $25,000 - $100,000 | End of term |
| 6 months | 5.15% p.a. | +0.10 | $25,000 - $100,000 | End of term |
| 9 months | 5.20% p.a. | +0.10 | $25,000 - $100,000 | End of term |
| 1 year | 5.30% p.a. | +0.15 | $25,000 - $100,000 | End of term |
| 3 months | 4.80% p.a. | +0.05 | >$100,000 | End of term |
| 6 months | 5.00% p.a. | +0.10 | >$100,000 | End of term |
| 9 months | 5.10% p.a. | +0.10 | >$100,000 | End of term |
| 1 year | 5.20% p.a. | +0.20 | >$100,000 | End of term |
Here's a comparison with the best term deposit rates of the big four:
| Bank | Best rate | Term | Balance amount | Conditions | Interest paid |
| CommBank | 5.15% p.a. | 12 months | $5,000 - $5m | Limited time special offer deal | Annually |
| Westpac | 5.15% p.a. | 12 months | $5,000 - $2m | Rate includes 0.10% bonus for existing Westpac customers opening or renewing online only | Monthly, half-yearly, at maturity |
| NAB | 5.15% p.a. | 12 months | $5,000 - under $2m | Annually | |
| ANZ | 5.25% p.a. | 12 months | $5,000 - under $2m | At maturity |
Macquarie's deposit reset
Earlier on Tuesday, Macquarie Bank announced changes to its popular, no conditions savings account product.
As well as ending the four-month welcome rate on new savings accounts opened after 11:59pm on Monday 14 September, Macquarie is also introducing new balance brackets taking effect from 1 November.
The new tiers have not changed the interest currently being paid - a 5.00% p.a. ongoing rate on balances up to $2 million and 2.75% p.a. on amounts over $2 million.
A Macquarie spokesperson said the bank was "updating" its savings balance brackets to reflect the change in its introductory rate.
"[But] no changes have been made to our ongoing variable interest rates, which continue to remain free of common 'hoops and catches' that trip up many Australian savers," the spokesperson said.
One contributor to an online finance forum hoped the new brackets weren't laying the groundwork for future changes to Macquarie's savings product.
Macquarie's transaction account has had three balance brackets for an extended period but has continued to pay 2.75% p.a. interest across all of them.
While Macquarie foreshadowed upcoming changes to its savings product, its new digital term deposit rate changes take immediate effect, which is typical of term deposit market rate announcements.
How are Macquarie's digital term deposits different?
Macquarie's relatively new digital products differ from other term deposit offerings on the market in that they don't charge break fees if customers want to access their funds before term.
Instead, depositors will keep the interest they've earned up until the day they give the required 31 days' notice, with their funds earning no interest during the notice period.
The deposit and interest accrued are automatically transferred into the customers' linked savings or transaction account after that time.
There are also no automatic rollovers when terms expire, with funds and interest earned being transferred straight to customers.
At many banks, end-of-term arrangements can see deposits kept in holding accounts that pay no interest or, after a grace period, automatically rolled back into the same term if the depositor doesn't act.
When the digital term deposit products were launched, Macquarie's head of deposits and payments Olivia McArdle said they aimed to "change the game" for Australian savers just as the bank's transaction and savings accounts had.
"We want to extend that same proposition to the term deposit market, which is well overdue for a shake-up," she said.
So far, Macquarie Bank has given no indication on how the new products have been received in the market.
Big banks also tweaking savings products
Macquarie Bank's announcement came on the same day Australia's biggest bank, CommBank, adjusted rates on its GoalSaver savings product.
CommBank cut the base rate on the account by 0.15% to 0.10% p.a. (down from 0.25% p.a.), switching the 0.15% over to the bonus rate.
GoalSaver's new bonus rate is now 4.90% (up from 4.75% p.a.), effectively keeping the headline rate at 5.00% p.a. when bonus conditions are met.
However, those failing to earn monthly bonus interest will now receive less interest on their savings than they would have previously.
Westpac group also lowers base rates
Earlier this week, the Westpac group made a similar move to cut the base rate on the Incentive Saver products of its regional brands - St George Bank, Bank of Melbourne, and BankSA.
That saw the old base rate cut by 0.09% to 0.01% p.a. (down from 0.10% p.a.) with the 0.09% switching to the bonus rate so the headline rate also remains unchanged at 5.15% p.a.
Topping up bonus rates at the expense of base rates is one way banks can pay out less interest on customers' savings.
It's a tactic that was called out by the Australian Competition and Consumer Commission in its 2023 study on deposit products which found 71% of conditional savings accounts did not receive bonus interest during its six-month study period.
The market has undergone some change since that time with many savers actively choosing to switch to no, or low, condition savings products where a competitive interest rate is paid without depositors having to meet monthly bonus interest requirements.
Analysts believe this may be one reason for the popularity of Macquarie Bank's 'no hoops' savings account which has seen triple the deposit growth of the broader market in recent years.
Other relatively recent additions to the no, or minimal, conditions savings market include ING's new Savings Booster account, AMP Bank's GO Save, and Judo Bank's Personal Savings Account.
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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 | – | – |
