Major banks ANZ and NAB were the most significant movers this month, as financial institutions brace themselves for another reduction in the cash rate from the Reserve Bank.
Westpac and Commbank too made changes to their term deposit product range this month earlier in the month.
The scope of these changes across each of the big four banks is relatively small compared to previous month’s changes: they’ve cut rates by a maximum of 25 basis points between them.
NAB term deposit rate changes
Yesterday (September 26), NAB cut rates on all of its term deposit rates, with most cut by 20 basis points including its one and five-year term deposits.
This follows a previous change it made to its four and five-month term deposits on September 12, which it cut by 25 basis points.
NAB’s one-year term deposit now has an interest rate of a measly 1.40% – below the annual rate of inflation (1.60%).
ANZ term deposit rate changes
ANZ cut all of its term deposit rates on September 16 by as many as 25 basis points, with most terms being reduced by 10 to 15 basis points.
ANZ’s one-year Advance Notice term deposit now has an interest rate that’s at least level with the rate of inflation at 1.60% p.a.
Commbank term deposit rate changes
Commonwealth Bank has made two rounds of rate changes this month:
- All terms were cut by up to 15 basis points on September 6
- Various terms were cut by 5 basis points on September 24
Commbank’s one-year deposit rate now sits at 1.55% p.a.
Westpac term deposit rate changes
Westpac cut all term deposit rates by as many as 20 basis points on September 20, with some rates cut by 10.
Westpac’s one-year term deposit rate is now the lowest of the big four at 1.35% p.a.
Other term deposit rate changes this month
Of the 50+ banks who changed term deposit rates in September, here are some of the most significant ones, either by the size of the cut or the size of the institution:
- Bankwest: cut term deposit rates by 10 basis points
- BOQ: cut term deposit rates by up to 50 basis points then again by up to 15 basis points
- Suncorp: cut term deposit rates by up to 15 basis points
- Bank Australia: cut term deposit rates by up to 25 basis points
- Macquarie: cut term deposits by up to 10 basis points and again by 5 basis points
- AMP: cut term deposit rates by up to 20 basis points then again by 15 basis points
- Westpac Group (St. George, BankSA and Bank of Melbourne): cut term deposit rates by up to 20 basis points
- ME: cut term deposit rates by up to 30 basis points
- UBank: cut term deposit rates by up to 30 basis points
- Bank of Sydney: cut term deposit rates by up to 45 basis points
- Bendigo Bank: cut term deposit rates by up to 20 basis points
- Teachers Mutual Bank & UniBank: cut term deposit rates by 15 basis points
There have been almost too many term deposit rate cuts to count in the months following consecutive changes to the cash rate in June and July, and the average term deposit rate has fallen to roughly 1.56% p.a. as of today’s date.
The infographic below shows just how drastically term deposit interest rates have fallen since before the June rate cut.
Judo Bank leading the pack
One of Australia’s newest banks, Judo Bank, is currently comfortably ahead of the rest of the market when it comes to term deposit rates.
While most term deposit products now struggle to even reach 2.00% p.a, Judo Bank offers term deposit rates as high as 2.40% p.a. for nine-month and one-year terms.
These term deposits have only been available from the start of this month, so it’s possible these rates are as high as they are to attract new customers.
These rates could well be lowered following the expected interest rate cut from the Reserve Bank next week, but for now they remain market-leading.
And if a term deposit is locked in before an interest rate cut, customers can keep that rate until their term expires.
The table below shows a snapshot of the highest one-year term deposit rates on the market right now.
|Judo Bank||2.40%||End of term||More details|
|Nexus Mutual||2.00%||End of term||More details|
|Arab Bank||1.90%||End of term||More details|
|Australian Military Bank||1.90%||End of term||More details|
|2.40%||End of term|
|2.00%||End of term|
|1.90%||End of term|
|Australian Military Bank|
|1.90%||End of term|
Rates correct as at 27 September, 2019. Rates based on a $50,000 deposit.