According to the RBA rate tracker, 90% of the market expects the RBA will keep the cash rate steady at 4.10% when the board convenes next week.

Quarterly CPI showed inflation continued to ease through the June quarter, which several analysts believe is evidence the 12 rate hikes we have already seen worked to curb consumer spending.

While the major banks generally lag the market leaders, a few of these banks slashed rates in the past week, narrowing the gap between the major players and smaller challengers, sending mixed signals to savers.

Bank of Sydney cuts rates by up to 100 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Four months $1,000-$1,000,000 End of term 4.00% p.a (-0.65)
Six months $1,000-$1,000,000 End of term 5.35% p.a (-0.10)
Nine months $1,000-$1,000,000 End of term 4.00% p.a (-0.85)
One year $1,000-$1,000,000 End of term 4.00% p.a (-1.00)

Just a couple of weeks ago, Bank of Sydney became the first provider in Australia to hit 5.50% p.a for term deposits, offering this return on its six month term products.

Now, this same product returns 5.35% p.a after a 10 basis point cut this week followed a 5 point reduction last week.

This remains the highest available rate for six month products in Australia (per Savings.com.au's market research) since Judo also elected to cut its rates this week.

Other term lengths had huge rate cuts, including a full percentage point drop on one year terms from 5 to 4% p.a.

Westpac increases rates by up to 50 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Three months $5,000-$2,000,000 End of term 3.50% p.a (+0.50)
Six months $5,000-$2,000,000 End of term 3.75% p.a (+0.45)
Nine months $5,000-$2,000,000 End of term 4.00% p.a (+0.45)
One year $5,000-$2,000,000 End of term 4.25% p.a (+0.30)

Since the cash rate hikes began, Australia's biggest banks have lagged behind the likes of Bank of Sydney and Judo for term deposit rates.

This week though, three of the big four increased rates, including Westpac, which now offers a one year term deposit rate 25 basis points higher than Bank of Sydney, a scenario there would have been long odds for even last week.

Prior to Wednesday's inflation data, Westpac economists expected a further 25 basis point increase to the cash rate next Tuesday, although this call was contingent on inflation which eased more than anticipated.

Westpac Senior Economist Justin Smirk said while he expects inflation will continue to moderate, it is likely to remain well above target levels for a while.

NAB increases rates by up to 25 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Six/Seven months $5,000-$1,999,999 End of term 4.00% p.a(+0.20)
Eight/Nine months $5,000-$1,999,999 End of term 4.25% p.a (+0.25)
One year $5,000-$1,999,999 End of term 4.85% p.a (+0.10)
One year $5,000-$1,999,999 Monthly 4.75% p.a (+0.10)

NAB also made big moves this week, hiking up some of its term deposit products by up to 25 basis points.

NAB economist Tapas Strickland is among those who expects two further cash rate increases will be necessary to fully curb inflation.

He correctly called service price inflation swelling despite the easing of headline inflation.

Wednesday's CPI release showed service price inflation in the June quarter was the highest since 2001 when GST was introduced.

Firstmac/Goldfields Money cut rates by up to 15 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Three months $5,000-$5,000,000 End of term 5.05% p.a (-0.05)
Six months $5,000-$5,000,000 End of term 5.25% p.a (-0.10)
One year $5,000-$5,000,000 End of term 5.25% p.a (-0.15)

Firstmac was another notable provider to cut rates this week.

For one year terms, Firstmac now offers returns 20 basis points lower than the market leaders AMP, although AMP rates do drop to 5.40% p.a for deposits less than $25,000.

CBA varies rates by up to 20 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Three months $5,000-$49,999.99 Monthly 3.40% p.a (-0.05)
Six months $5,000-$49,999.99 Monthly 3.65% p.a (-0.05)
Six months $50,000-$1,999,999.99 Monthly 3.70% p.a (-0.05)
One year (Special offer) $5,000-$1,999,999.99 Annually 4.85% p.a (+0.10)

Australia's largest bank cut rates on several of its term deposit products by 5 basis points, but hiked up its highest available special offer returns.

The special offer is available for a limited time only for existing personal or SMSF customers.

Judo cut rates by 10 basis points

Term length Deposit size Payment frequency Interest rate (percentage point change)
Three months $1,000-$999,999 End of term 5.00% p.a (-0.1)
Six months $1,000-$999,999 End of term 5.30% p.a (-0.1)
Nine months $1,000-$999,999 End of term 5.20% p.a (-0.1)
One year $1,000-$999,999 End of term 5.35% p.a (-0.1)

Judo cut rates on its previously market leading products by 10 basis points this week.

The neobank is now 0.05% behind Bank of Sydney for six month terms, and 0.10% behind AMP for one year (although only 5 basis points behind AMP for deposits less than $25,000).

Other movers

  • St George increased rates by up to 50 basis points
  • Macquarie cut rates on 3 month terms by 5 basis points

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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 February 28, 2024. View disclaimer.

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