Major banks lead latest wave of term deposit rate increases
There's no sign of the term deposit rate surge easing up, with big new rates coming this week from Commbank, Westpac, and ING among others.
Markets continue to price in another RBA hike in May, and concerns about productivity and the economy's capacity for non-inflationary growth may be pointing towards a higher ceiling for interest rates than previously thought.
This week saw rates crack 5% for the first time, as well as a new benchmark in the one year market.
Read more: Will term deposit rates keep surging?
Judo Bank go big on long term
Judo Bank is officially the first bank to crack the 5% mark in this rate hike cycle, now offering a 5% p.a. return on its five-year term deposits.
Judo is also now offering the highest rates in the Savings.com.au database for two-, three-, and four-year terms, pivoting towards longer term deposits perhaps with revised cash rate expectations.
Read more: Judo Bank latest term deposit rates
Heartland goes to 4.88%
| Term length | Deposit size | Payment frequency | Interest rate |
|---|---|---|---|
| Three months | $10,000+ | End of term | 4.40% p.a. (+0.25) |
| Six months | $10,000+ | End of term | 4.55% p.a. (+0.25) |
| Nine months | $10,000+ | End of term | 4.75% p.a. (+0.25) |
| One year | $10,000+ | End of term | 4.88% p.a. (+0.25) |
Heartland Bank is the only provider that can compete with Judo for consistency in the term deposit market over the past couple of years, and it matched Judo this week with some market topping rates of its own.
For now, Heartland seems to be focused on shorter term deposits (one year and below) which contrasts Judo - all Heartland's rates for terms more than one year are still below 4%.
For those short terms though, at 4.88% p.a. Heartland now offers the top one year return in the Savings.com.au database, 12 bps above those of Judo and Credit Union SA.
Lunar new year special offers from CBA, Westpac Group
| Product | Deposit size | Payment frequency | Interest rate |
|---|---|---|---|
| Westpac – 8 months | $5,000-$2,000,000 | End of term | 4.38% p.a. (4.28% p.a. in branch) |
| St George, Bank SA, Bank of Melbourne – 8 months | $1,000-$2,000,000 | End of term | 4.68% p.a. (4.58% p.a. in branch) |
| Commbank – 18 months | $5,000-$5,000,000 | Annually | 4.68% p.a. |
The two biggest banks in Australia have decided to celebrate Lunar/Chinese new year with some big new term deposit returns, albeit for a limited time.
While Westpac's 4.38% p.a. top return is comparatively modest, its subsidiaries have gone big with a top return of 4.68% p.a. for eight month terms - above the top six month rates in the Savings.com.au database although still behind Heartland Bank's top nine month return (4.75% p.a.).
Meanwhile, Commbank is offering the same rate for 18 months and for balances up to $5,000,000, also for a limited time, and only for existing retail or SMSF customers.
ING go to 4.6% for six months
| Term length | Deposit size | Payment frequency | Interest rate |
|---|---|---|---|
| Three months | $10,000+ | End of term | 4.40% p.a. (+0.20) |
| Six months | $10,000+ | End of term | 4.60% p.a. (+0.20) |
| Nine months | $10,000+ | End of term | 4.60% p.a. (+0.25) |
| One year | $10,000+ | End of term | 4.70% p.a. (+0.30) |
| Two years | $10,000+ | End of term | 4.10% p.a (+0.20) |
ING is now the frontrunner among the biggest banks in Australia by customer deposit book, its top rate of 4.70% p.a. nudging slightly ahead of that CBA special offer.
For six-month TDs, ING is now level with Credit Union SA with the highest return in our database, still slightly ahead of Heartland.
Commonwealth Bank adjusts rates
| Term length | Deposit size | Payment frequency | Interest rate (change) |
|---|---|---|---|
| 18-23 months | $5,000-$49,999 | Annually | 4.35% p.a. (+0.05) |
| 24-33 months | $5,000-$49,999 | Annually | 4.35% p.a. (-0.05) |
While the new special offer is the eyecatcher, CommBank also slightly adjusted rates on some of its standard products.
Two-year terms with deposits below $50,000 were trimmed back slightly to 4.35% p.a. (deposits above $50k still return 4.40% p.a.) while 18-23 month terms were boosted slightly to the same rate.
Macquarie hikes by up to 25 bps
| Term length | Deposit size | Payment frequency | Interest rate |
|---|---|---|---|
| Three months | $5,000-$1,000,000 | End of term | 4.35% p.a. (+0.05) |
| Six months | $5,000-$1,000,000 | End of term | 4.60% p.a. (+0.10) |
| Nine months | $5,000-$1,000,000 | End of term | 4.60% p.a. (+0.10) |
Other movers
- Bank Australia and Qudos Bank hiked one-year rates 10 bps to a top return of 4.60% p.a.
- BankVic hiked rates by 10 bps, taking its top return to 4.50% p.a. for twelve months renewed online
- QBank hiked rates by up to 30 bps
Advertisement
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 | – | – |
