As most people anticipated, the RBA decided to hold the cash rate steady at 4.10% earlier this week.

In her first monetary policy board meeting, new RBA Governor Michele Bullock maintained further tightening of monetary policy might be necessary to ensure inflation returns to target levels, and it looks increasingly unlikely rates will be cut until well into 2024.

Pre-empting Tuesday's decision, last week saw several prominent term deposit providers including Bank of Sydney, Judo and Macquarie increase rates.

This week, AMP, Bank of Sydney and Firstmac followed suit, with substantial rate hikes.

AMP increases rates by up to 50 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Six months $5,000-$24,999 End of term 4.85% p.a (+0.20)
Six months $25,000-$4,999,999 End of term 4.90% p.a (+0.20)
One year $5,000-$24,999 End of term 4.90% p.a (+0.45)
One year $25,000-$4,999,999 End of term 4.95% p.a (+0.45)
Two years $5,000-$24,999 Annually 4.85% p.a (+0.50)
Two years $25,000-$4,999,999 Annually 4.90% p.a (+0.50)

AMP hiked up rates across its range of term deposit products, with increases of up to 50 basis points pushing rates back up towards the coveted 5% p.a mark.

Previously among the market leaders, AMP made big cuts at the start of September, with its one year term deposit rate dropping to 4.50% p.a, but this week's raise reverses the trend once again.

Shane Oliver, AMP Chief economist, is concerned the RBA has tightened rates more than necessary, and does not believe we will see any further rate hikes.

"The RBA has already done more than enough to slow the economy in order to rebalance demand and supply and bring inflation back to target," he said.

He expects rate cuts to begin in the first half of 2024.

For now though, with a 4.10% cash rate confirmed for at least another month, AMP seemingly is looking to rebuild market share in term deposits.

Bank of Sydney increase rates by 5 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
Three months $1,000-$1,000,000 End of term 4.80% p.a (+0.05)
Six months $1,000-$1,000,000 End of term 5.05% p.a (+0.05)
Nine months $1,000-$1,000,000 End of term 5.10% p.a (+0.05)

Bank of Sydney also hiked up its rates this week, with 5 basis point increases to three, six and nine month products after moving one year terms to 5.25% p.a last week.

The turnaround at Bank of Sydney continues after dramatic cuts throughout August and September, with the bank now back among the leaders in most term deposit markets.

Firstmac (Goldfields Money) increases rates by up to 25 basis points

Term length Deposit size Payment frequency Interest rate (Percentage point change)
One month $5,000-$5,000,000 End of term 4.00% p.a (+0.25)
Six months $5,000-$5,000,000 End of term 4.80% p.a (+0.20)
One year $5,000-$5,000,000 End of term 4.80% p.a (+0.20)

It's a similar story at Firstmac, which has also done a 180, hiking up rates once again after several cuts.

At one stage, Firstmac offered 5.40% p.a returns for both six month and one year terms, but cut rates dramatically in August and September, dropping to 4.60% p.a.

Even after this week's increase, returns are still well behind what they were, but it remains to be seen whether the white labelled product will fire again, taking rates back up towards 5% p.a.

Other movers

  • Australian Military Bank cut rates by up to 115 basis points

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Provider

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          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 July 15, 2024. View disclaimer.

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