- Macquarie Bank is lowering select rates on its new digital term deposit products
- Five basis points has been trimmed from six-, nine- and 12-month rates
- It's the first time rates have been adjusted on Macquarie's new digital term deposit offerings
- The move likely reflects market sentiment in the run up to next week's cash rate decision
Less than a month after launching its digital term deposit products, Macquarie is adjusting select rates lower.
The deposit market pacesetter joins a number of banks in adjusting term deposit rates in the run-up to next week's Reserve Bank cash rate decision.
Here are the current rates for Macquarie's digital term deposit products, requiring a minimum deposit of $25,000:
| Term | Rate for deposit of $1m or under (% change) | Rate for deposit over $1m (% change) | Interest paid |
3 month (unchanged rates) | 5.00% p.a. | 4.75% p.a. | End of term |
| 6 month | 5.05% p.a. (-0.05) | 4.90% p.a. (-0.05) | End of term |
| 9 month | 5.10% p.a. (-0.05) | 5.00% p.a. (-0.05) | End of term |
| 1 year | 5.15% p.a. (-0.05) | 5.00% p.a. (-0.05) | End of term |
Macquarie's three-month digital rate remains unchanged at 5.00% p.a., matching the ongoing rate of the bank's popular no-conditions savings account on balances up to $2 million.
The six-, nine-, and 12-month digital term deposit rates have all been lowered by five basis points.
While not the highest rates on the market, Macquarie's new digital term deposit rates come with other incentives.
What makes Macquarie Bank's digital term deposit products different?
Unlike many traditional term deposit products, Macquarie's new digital offerings come without break fees if customers want to access their cash earlier.
Instead, depositors can provide 31 days' notice of their intention to withdraw their funds, earning no interest during the notice period but receiving all interest earned up to that point.
As well, Macquarie's digital products don't automatically roll over to a new term if customers takes no action after deposits mature.
Rather, all funds, including interest earned, are automatically transferred into a linked account, allowing customers to determine if they wish to open new term deposits at any time in the future.
Savers 'back in control'
Macquarie launched its digital products last month in a bid to innovate in what can be fairly regarded as the stodgy term deposit space.
Macquarie touts its digital offerings as giving savers access to "a simpler and more transparent alternative" to Australia's household term deposit market.
Customers manage their own admin through the Macquarie app or online banking, arguably without the perception their money is being locked away and they will be punished if they need to access it.
Macquarie Bank's head of deposits and payments Olivia McArdle said it's another way Macquarie is trying to "shake up" the deposits market.
"For too long, Australians have had to haggle with their bank to ensure they're getting the best rate when opening a new term deposit," she said.
"Too often, they've also been stung by hidden fees, lured in by fleeting promotional rates, or heavily penalised when accessing their own money earlier than planned due to an unexpected expense. Those days are over."
Will Macquarie's digital term deposits emulate its savings account success?
Macquarie's no-conditions savings account has been the standout success story of Australia's deposits market, with growth consistently outstripping the industry average over recent years.
Australia's 'fifth big bank' currently holds a 6.4% share of the household deposits market although term deposits make up less than 4% of Macquarie's total deposit holdings.
It remains to be seen whether the reimagined term deposit products will have the same appeal as Macquarie's savings account.
It's likely existing Macquarie savings customers may be drawn to earn slightly higher interest rates on their funds if they foresee them sitting in their accounts for an extended period.
New term deposit shoppers may also be lured by the non-punitive policy on early withdrawals.
It's the first time the bank has adjusted rates on its new digital term deposit products since their launch.
However, this is likely to reflect prevailing sentiment around rates, with markets pricing in a 4% chance of a cash rate increase next week, up from 0% earlier in the week.
The Reserve Bank's monetary policy board is due to hand down its cash rate decision on Tuesday 11 August.
Savings.com.au will provide live coverage of the decision.
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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 | – | – |
