It’s been a week of bedlam for those keeping a close eye on the term deposit market, with one market leader dropping off the podium and another stepping up. 

Why? Well, that’s hard to say. 

This week saw the only big four bank previously predicting the Reserve Bank of Australia (RBA) board to hike the cash rate at its February meeting abandon its claim.

NAB flipped its forecast from a hike to a hold and now expects the cash rate has peaked and is likely to begin falling later this year.

Meanwhile, unemployment was found to have remained steady in December, as the participation rate came off a record high and 65,000 jobs were cut from the economy. 

Looking forward, the Australian Bureau of Statistics will release inflation figures for the December quarter on 31 January.

Experts are hopeful the news will be good, and no doubt the RBA will be watching closely as the final piece of the data puzzle falls into place ahead of its board meeting next month.

But enough of that. Let's get down to term deposit business.

While there wasn’t a notable catalyst for this week’s term deposit interest rate changes, there’s no arguing they made a dint to the market.

ING dumps 20 basis points from market leading term deposit rate 

Headlining this week’s changes to term deposit rates was a shock move from once-market leader ING. 

The Dutch banking monolith cut the rate offered on its 12-month term deposit product by 20 basis points, leaving it at 5.10% p.a. 

The bank hiked its offered rate to 5.30% p.a. in November, a rate that was initially matched by Bank of Sydney and briefly bested by Judo Bank. 

Sadly for many, those days now seem behind us.

Despite most experts forecasting interest rates to remain steady until at least late 2024, term deposit market participants have been cutting in recent weeks.

The current market leading rate for a one-year term deposit is 5.20% p.a., offered by Bank Australia, Qudos Bank, and (now) G&C Mutual Bank.

But it wasn’t all bad news for ING fans this week.

The bank hiked the rate offered on its three- and six-month term deposit products to 4.85% p.a. apiece. 

G&C Mutual Bank emerges among term deposit market leaders

As mentioned above, G&C Mutual Bank is now among those offered a leading 5.20% p.a. on one-year term deposits, paying interest annually, having hiked by 20 basis points this week.

That rate is reduced to a still-notable 5.15% p.a. for those receiving interest monthly.

Those same rates also apply to nine-month term deposits offered by the bank.

However, those looking for a three-year term deposit might be disappointed by G&C Mutual Bank after it slashed rates on the product by 40 basis points.

It now promises an interest rate of 4.90% p.a. on three-year deposits paying annually and 4.85% p.a. on those paying monthly.

BOQ & ME Bank slash term deposit interest rates by 25 basis points

Sunshine State giant Bank of Queensland (BOQ) and its subsidiary ME Bank each cut term deposit interest rates this week.

Though, one remains more competitive than the other.

The top rate offered by Bank of Queensland for deposits of $5,000 to $250,000 – promised on its 12-month term deposit paying interest at end of term – was dropped 20 basis points to 4.90% p.a.

It also lowered the headline rate on its six- and nine-month term deposits to 4.80% p.a. 

ME Bank, on the other hand, now promises a 4.95% p.a. return on its 12-month term deposit product paying interest at end of term. 

Other changes made to the term deposit interest rates offered by ME this week are as follows:

Term length

Deposit size

Payment frequency 

Interest rate (p.a.)

Seven months

$5,000-$2,000,000

End of term

4.85% (-0.25)

Nine months

$5,000-$2,000,000

End of term

4.85% (-0.25)

One year

$5,000-$2,000,000

End of term

4.95% (-0.20)

Judo Bank cuts term deposit rates (again)

Finally, in yet another roll-back, Judo Bank has entered the chat once more after slashing term deposit interest rates by as much as 15 basis points.

Here are new rates on offer at Judo Bank for deposits paying interest at end of term: 

Term length

Deposit size

Payment frequency 

Interest rate (p.a.)

Three months

$1,000-$999,999

End of term

4.95% (-0.05)

Six months

$1,000-$999,999

End of term

5.05% (-0.10)

Nine months

$1,000-$999,999

End of term

5.10% (-0.05)

One year

$1,000-$999,999

End of term

5.15% (-0.05)

Two years

$1,000-$999,999

End of term

5.00% (-0.15)

Three years

$1,000-$999,999

End of term

5.00% (-0.10)

Four years 

$1,000-$999,999

End of term

5.00% (-0.10)

Five years

$1,000-$999,999

End of term

5.00% (-0.10)

Image by Choong Deng Xiang on Unsplash.