.jpg)
- NAB has cut rates on its range of term deposits by up to 0.20%.
- The new top rate at NAB is now 4.60% p.a., joint lowest of the big four.
- Move no surprise as NAB economists see an RBA rate cut next week.
The highest term deposit rate at NAB is now 4.60% p.a. for eight months after a 0.15% cut.
That's now 20 basis points behind Westpac's top rate of 4.80% p.a. and 15 bps short of the 4.75% p.a. available at ANZ, both also on eight month terms.
However these banks are yet to cut, and all majors tend to follow each other on the term deposit merry-go-round.
NAB follows the lead of CommBank after Australia's biggest bank cut TD rates last week, also to a new top rate of 4.60% p.a.
The major banks have generally lagged behind smaller outfits on TD rates over the past couple of years, and there are still several products out there offering 5% p.a. or more.
NAB rate cuts were better news for consumers last week when it slashed fixed rate mortgages.
New NAB term deposit rates
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $5,000-$1,999,999 | End of term | 3.00% p.a. (-0.15) |
| Four months | $5,000-$1,999,999 | End of term | 3.15% p.a. (-0.10) |
| Five months | $5,000-$1,999,999 | End of term | 3.25% p.a. (-0.10) |
| Eight months | $5,000-$1,999,999 | End of term | 4.60% p.a. (-0.15) |
| Nine months | $5,000-$1,999,999 | End of term | 3.60% p.a. (-0.20) |
| Ten months | $5,000-$1,999,999 | End of term | 3.70% p.a. (-0.10) |
| Eleven months | $5,000-$1,999,999 | End of term | 3.70% p.a. (-0.10) |
| One year | $5,000-$1,999,999 | End of term | 4.20% p.a. (-0.20) |
| Three/Four/Five years | $5,000-$1,999,999 | Annually | 2.90% p.a. (-0.20) |
RBA cut a lock?
NAB cutting deposit rates is unsurprising considering its economists are seeing a cut from the RBA next week.
Most major economists agree the most likely outcome of the February monetary policy meeting is a 25 basis point cut after the encouraging fourth-quarter inflation numbers.
The ASX rate tracker shows markets are also nearly unanimous with trading activity suggesting a 95% chance of a cut.
Lending indicators for Q4, the NAB Business Survey and the Westpac Consumer Confidence Survey will all be released before next Tuesday's meeting, but NAB's economics team considers this data "unlikely to shape [RBA] views".
However, there are still arguments for the RBA opting against bringing rates down in February.
The labour market is still strong with the unemployment rate below forecast, there still isn't concrete evidence labour productivity is picking up, and discretionary spending also increased at the end of 2024.
Although NAB economist Taylor Nugent expects the RBA will cut, he feels there is a case for a 10th consecutive hold.
"There is option value in waiting to better assess the trajectory of the labour market and the extent of the pick up in growth," he said.
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 | – | – |
