It was a relatively quiet week for term deposit rate changes ahead of next Tuesday's monetary policy decision.

Most observers agree the RBA board are unlikely to alter the cash rate, with a 95% market consensus that rates will remain at 4.35% for now.

Governor Michele Bullock has maintained the RBA will raise rates further if needs be, but given soft GDP growth and rising unemployment, it would likely take a substantial shock for the inflation outlook to go up enough to need further hikes.

Economists from most of Australia's major banks believe rate cuts from September are a possibility.

While this means it's less likely for term deposit rates to return to the highs of 5.50% p.a, a more stable environment still could mean some providers boost rates to try to gain market share.

This week for example, Credit Union SA made a big play, offering a new market leading rate across all term deposit products in Australia (according to savings.com.au's market research).

Credit Union SA varies rates up to 80 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Five months $5,000-$99,999,999.99 End of term 4.20% p.a (-0.80)
Seven months $5,000-$99,999,999.99 End of term 5.25% p.a (+0.20)

Credit Union SA sprung a surprise this week, with a 20 basis point hike to its seven month terms setting a new market leading standard.

No other term deposit product on the market currently returns more than 5.15% p.a, so this is likely to shake up the landscape significantly.

At Credit Union SA, the next best rate is 4.80% p.a on one year terms, so there's a clear outstanding choice among its range of products, and a slant to shorter-term investments.

Judo boosts rates 10 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Six months $1,000-$999,999 End of term 5.10% p.a (+0.10)
Six months $1,000-$999,999 Monthly 5.00% p.a (+0.10)

One of the other eye catching rate increase this week came from Judo, which boosted six month returns by 10 basis points.

The highest six month rate at Judo is now just 5 basis points behind the market leaders Gateway Bank.

Judo offers its highest rate, 5.10% p.a, on six month, nine month and one year terms, with a 10 basis point discount in exchange for monthly interest payments.

Macquarie Bank cuts rates up to 10 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Six months $5,000-$1,000,000 End of term 4.70% p.a (-0.05)
One year $5,000-$1,000,000 End of term 4.65% p.a (-0.05)
Two years $5,000-$1,000,000 Annually 4.35% p.a (-0.05)
Three/Four/Five years $5,000-$1,000,000 Annually 4.25% p.a (-0.10)

Macquarie was the largest bank to alter term deposit rates this week, with customary minor adjustments to its range of products.

The highest rate at Macquarie is for six month terms rather than longer terms, which is a common theme at the moment given the long term expectations for the cash rate.

Challenger Bank cuts rates 5 bps

Term length Deposit size Payment frequency Interest rate (Percentage point change)
One year $25,000*-$1,000,000 End of term 5.15% p.a (-0.05)
Two years $25,000*-$1,000,000 End of term 4.70% p.a (-0.05)

*$5,000 for Challenger Bank customers

After G&C Mutual Bank cut last week, Challenger Bank has followed suit, meaning for now, no term deposit rates in Australia are at 5.20% p.a for one year terms (according to Savings.com.au's market research).

Challenger only cut one year terms 5 basis points though, so it remains at a market leading rate of 5.15% p.a. 

Other movers

  • Arab Bank Australia cuts rates 10 bps
  • Australian Unity cut rates up to 10 bps, including one year terms which are now at 5.00% p.a.

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Provider

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At Maturity, Monthly$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]2500031$product[$field["value"]]$product[$field["value"]]More details

Term Deposit - 6 months

    At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]10008$product[$field["value"]]$product[$field["value"]]More details

    Online Term Deposit - 6 months

      At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details

      SMSF TD - 6 months (at maturity)

        Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]10000$product[$field["value"]]$product[$field["value"]]More details

        Term Deposit ($10k-$500k) - 6 months

          Important Information and Comparison Rate Warning

          All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of June 19, 2024. View disclaimer.

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