After softer than anticipated price rises over the year to May, there's fresh confidence that inflation has moderated enough to warrant further loosening of monetary policy.
Commonwealth Bank, Westpac and NAB are now all officially predicting the RBA will cut once again when the board meet on 8 July.
Accordingly, Australian deposit products took a beating this week, with several big names dropping back returns for savings accounts and term deposits.
However, BCU Bank and ING Bank were surprise outliers, swimming against the tide with a couple of surprise boosts to its rates.
Here were the major deposit rate changes in the week past:
NAB leads savings account cuts
The biggest name to drop savings account this week was NAB, cutting its bonus rate on the Reward Saver Account by another 0.05%.
On top of the cuts after the May RBA decision, that leaves the top rate on the Reward Saver at 4.35% p.a.
That's lower than the top ongoing bonus rate at Commonwealth Bank, Westpac and ANZ, although there is still a four month introductory rate of 4.65% p.a. on the NAB iSaver.
Elsewhere, Bank of Queensland finally cut the top rate on its high interest Future Saver account (for customers aged 14-35) 15 bps to 5.10% p.a. on balances up to $50,000.
HSBC also cut its Bonus Savings Account to a new top rate of 3.75% p.a. when all conditions are met, while there was a big cut from GMCU, bringing its Advantage Saver rate down 0.50% to a top rate of 4.24% p.a.
Finally, BankVic also cut its range of savings accounts by 0.50% - its top rate (Bonus Saver) is now 4.30% p.a. (0.05% base, 4.25% bonus)
Read more: NAB cut savings account rates
BCU Bank varies term deposit rates
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $1,000-$1m | End of term | 4.25% p.a. (-0.05) |
| Five months | $1,000-$1m | End of term | 4.55% p.a. (+0.05) |
| Seven months | $1,000-$1m | End of term | 4.30% p.a. (+0.60) |
This unexpected hike from BCU Bank puts its leading five month rate near the summit of the TD market.
Credit Union SA and MOVE Bank are the only providers in our database to offer a higher rate - both the Credit Union SA five month and MOVE Bank four month products have a top rate of 4.60% p.a.
Elsewhere, the seven month rate got a hefty 0.60% boost, while three month returns were trimmed back slightly.
ING vary TD rates
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $10,000-$5m | End of term | 4.30% p.a. (+0.20) |
| Four months | $10,000-$5m | End of term | 4.25% p.a. (+0.25) |
| Seven months | $10,000-$5m | End of term | 4.10% p.a. (-0.15) |
| Eleven months | $10,000-$5m | End of term | 3.95% p.a. (-0.15) |
| One year | $10,000-$5m | End of term | 3.95% p.a. (-0.10) |
ING was the other surprise hiker last week, giving three and four month rates a handy boost.
At 4.30% p.a., the three month rate at ING is now just 10 bps behind Australian Unity Bank, currently the highest three month rate in our database.
That's also the highest term deposit rate of any products at the biggest banks in Australia by household deposit size, 10 bps ahead of Macquarie's three month product (4.20% p.a.).
Gateway Bank, Great Southern Bank cut term deposit rates
Elsewhere, two banks that have tended to offer among the strongest rates on market cut this week.
Gateway Bank trimmed its nine month and one year rates by 5 bps, leaving its six month rate untouched at 4.55% p.a.
Great Southern Bank meanwhile cut back its range of products by 10 bps, including its four month rate (down to 4.45% p.a.) and six month (now 4.40% p.a.)
Other movers
- Bendigo Bank varied rates by up to 65 bps including a 0.40% boost to seven month rates, although at 3.90% p.a. the top rate remains relatively modest.
- Bank Australia cut its three month rate 0.20% down to 4.25% p.a.
- P&N Bank cut rates by up to 105 bps
- The Mutual Bank cut by up to 40 bps
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Term Deposit - 6 months | |||||||||||||
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Picture from NAB media
Harry O'Sullivan
Denise Raward
