During May, there was a scramble among term deposit providers in Australia to boost rates in the face of a revised outlook for the coming months.

June has not started with the same intensity, the market leaders seemingly content for now with the rates on offer, with Bank of Sydney in fact slightly cutting back returns on its term deposit range.

Nevertheless, the week past still saw fresh rates from two of Australia's very largest banks.

ANZ and NAB both now offer a maximum rate of 4.80% p.a.

ANZ varied Advance Notice term deposit rates up to 70 bps

Term length Deposit size Payment frequency Interest rate (Change)
Six- < Seven months $5,000-$1,999,999 End of term 3.90% p.a (-0.20)
Eight- < Nine months $5,000-$1,999,999 End of term 4.05% p.a (-0.20)
Eleven- < Twelve months $5,000-$1,999,999 End of term 4.80% p.a (+0.70)
One year - < Two years $5,000-$1,999,999 End of term 4.60% p.a (-0.10)

While the majority of products saw rates cut, the boost to 11 month terms increases the maximum TD rate available at ANZ to 4.80% p.a.

Customers need to give at least 31 days' notice to withdraw funds early from an Advance Notice term deposit, in exchange for much higher rates than ANZ's standard range.

For example, a normal ANZ term deposit has a maximum rate of 0.10% p.a on 11-12 month terms, 470 basis points lower than the Advance Notice equivalent.

While the highest rates at ANZ are well below the likes of Heartland, Judo and Bank of Sydney, they are comparable to what the other members of Australia's 'Big Four' banks have on offer.

Westpac and now NAB also offer a top rate of 4.80% p.a, on eleven months and one year respectively.

If you're set on a term deposit with one of the big four, Commonwealth Bank currently has the highest rate, at 4.90% p.a on 11 month terms, but this rate is a limited time special offer available to existing personal or SMSF customers.

NAB boosted one year rates 10 bps

Term length Deposit size Payment frequency Interest rate (Change)
One year $5,000-$1,999,999 End of term 4.80% p.a (+0.10)
One year $5,000-$1,999,999 Monthly 4.70% p.a (+0.10)

After this week's rate movements, NAB now offers the strongest one year term deposit rate from the big four.

While the 4.90% p.a rate available at CommBank is higher, as long as you're happy leaving your money in the TD for a bit longer, the extra month on the NAB product means you'll come out ahead.

A $5,000 investment at 4.90% p.a over 11 months means a payout of about $225 - subject to tax - while the same amount in a 12 month TD at 4.80% p.a returns $240.

Bank of Sydney cuts up to 10 bps

Term length Deposit size Payment frequency Interest rate (Change)
Six months $1,000-$1,000,000 End of term 5.20% p.a (-0.05)
Nine months $1,000-$1,000,000 End of term 5.15% p.a (-0.10)
One year $1,000-$1,000,000 End of term 5.15% p.a (-0.10)
One year $1,000-$1,000,000 Monthly 5.15% p.a (-0.10)

This week's round of cuts means Bank of Sydney relinquishes its position as a joint market leader for nine month terms, dropping 10 basis points behind Judo, where the highest rate remains 5.25% p.a.

Bank of Sydney is one of the few TD providers to offer the same rate regardless of how frequently interest is paid, so for monthly payments it is now level with Judo at 5.15% p.a.

This latest cut notwithstanding, Bank of Sydney has been one of the frontrunners for TD rates over the past year, its household deposit book growing from about $1 billion to $1.6 billion in the past 12 months.

Chief Retail Banking Officer Huw Bough says TDs have become a "really important" part of the bank's strategy.

"We've had a 26% increase in deposits over the last 12 months," he told the Savings Tip Jar podcast.

"It's [been] both existing customers as well as new to bank customers... flares are back in fashion and I think term deposits are too."

He went on to give a bit of insight into what factors might cause minor rate changes, like this week's cuts.

"One [potential reason] would be customer behaviour and demand," he explained

"Another is the organisational strategy and position...which is making sure we've got the minimum liquidity holdings and meet our funding needs, as well as the cost of funds and the yield management."

Since the GFC, Australian banks have been required to hold a certain amount of deposits on its books by law to cover any short-term losses. This is why many banks require 31 days' notice to withdraw term deposit funds, and why a bank might adjust rates here and there to balance its book.

Other movers

  • MyState boosted five month term deposits 70 bps to 5.10% p.a
  • BOQ boosted rates up to 30 bps, including a top return of 5.05% p.a on one year terms.
  • ME Bank hiked rates 30 bps
  • Australian Military Bank increased TDs by 160 bps to 5.10% p.a for four/five month terms.

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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.

Update resultsUpdate
BankTerm DepositInterest Rate Interest Frequency Term Automatic Rollover Maturity Alert Early Withdrawal Available Minimum Deposit Maximum Deposit Notice Period to Withdraw Online Application Joint Application TagsFeaturesLinkCompare
5.20% p.a.
At Maturity, Annually
6 months
$5,000
$1,000,000
Featured
  • Guaranteed rate of return
  • Manage your term deposit online
  • Choose your own term - Options range from one month to five years
5.30% p.a.
At Maturity, Monthly
6 months
$25,000
$1,000,000
31 days
5.20% p.a.
At Maturity
6 months
$1,000
$1,000,000
8 days
5.25% p.a.
At Maturity
6 months
$1,000
$1,000,000
31 days
5.10% p.a.
Annually, At Maturity
6 months
$10,000
$499,999
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 . View disclaimer.

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