All of the major banks' economists forecast one more cash rate cut is coming in November.
If the central bank's monetary policy board delivers another 25 bps cut as expected, this would bring the cumulative reduction on the country's benchmark rate to 100 basis points.
While it seems unlikely that the latest CPI data, which came in hotter than anticipated, would derail the RBA's guidance that "some further reduction in the cash rate" would be necessary, this makes TD hiking activity more noteworthy.
Most of the increases we noted this week have been concentrated on short-term rates, Judo Bank's 20 bps hike on its two-month term deposits, for instance.
This suggests banks are keen to lock in funds from savers within the window between today and the anticipated rate cut on Melbourne Cup Day.
Term deposit vs savings accounts
With short-lived incentives and rates falling, depositors may yield better returns in savings accounts, many of which currently offer rates near 5% p.a.
Note, however, that for many of these savings accounts, customers would have to meet certain deposit conditions and other requirements to get the boosted rates, which an ACCC inquiry made in late 2023 found 71% failed to do.
Speaking on the Savings Tip Jar podcast, Macquarie Bank head of deposits and payments Olivia McArdle, said many people don't actually get the savings account rate they signed up for.
"We're seeing people that are just sick of it [bonus rate conditions] and saying that, 'I just can't be tracking this on top of everything else I'm doing in life'," she said.
Macquarie Bank savings account currently offers an ongoing variable rate of 4.25% p.a. on balances up to $2 million, while new customers get a 4.60% p.a. welcome rate for the first four months on balances up to $250,000.
This places it among the highest hoop-free rates in the market.
As further RBA cuts loom, we will likely see more banks slash savings account rates just as term deposits are expected to continue falling.
If you prefer to lock in while you can in fixed-term rates, here are the latest movements on the term deposit market.
Judo Bank varies term deposit rates
| Term | New rate (change) | Payment frequency |
|---|---|---|
| 2 Months | 2.30% p.a. (+20 bps) | End of term |
| 3 Months | 4.05% p.a. (-15 bps) | End of term |
| 6 Months | 4.05% p.a. (-15 bps) | End of term |
| 9 Months | 4.10% p.a. (-5 bps) | End of term |
| 5 Years | 4.30% p.a. (-5 bps) | Annually |
Term deposit rates from Judo Bank generally headed downwards this week, save for its two-month term that got a 20 basis point boost.
Judo, which is one of the few banks still offering above-4% returns on TDs, has cut select term deposits by up to 20 bps.
Rates on popular terms such as three and six months were lowered, though the bank's top five-month rate of 4.35% p.a. was untouched in this round of cuts.
In addition to its short-term deposits, Judo Bank also trimmed its five-year TDs by 5 bps to 4.30% p.a.
The minimum deposit is $1,000, and the maximum is $2 million.
Suncorp Bank boosts short-term deposits
| Term | New rate (change) | Deposit size | Payment frequency |
|---|---|---|---|
| 2 Months | 1.95% p.a. (+10 bps) | $5,000 - $99,999.99 | End of term |
| 3 Months | 4.00% p.a. (+40 bps) | $5,000 - $99,999.99 | End of term |
| 6 Months | 3.95% p.a. (-10 bps) | $5,000 - $99,999.99 | End of term |
| 9 Months | 3.65% p.a. (-5 bps) | $5,000 - $99,999.99 | End of term |
Like Judo Bank, Suncorp Bank also boosted its two-month (as well as three-month) TDs, while simultaneously lowering returns on other terms.
Suncorp applied a 40 basis point increase on its three-month term deposit, bringing the rate up to 4.00% p.a. on deposits starting at $5,000.
Meanwhile, deposits locked for two months will get 1.95% p.a. following the 10 bps hike.
The bank also appears to expect the cash rate to go down in the near term as rates on terms of four to 11 months were reduced by as much as 10 bps.
For depositors willing to lock in to longer terms, Suncorp Bank boosted its two-year TDs by 50 bps to 3.60% p.a., paid quarterly on deposits starting at $5,000
AMP Bank cuts term deposits anew
| Term | New rate (change) | Deposit size | Payment frequency |
|---|---|---|---|
| 3 Months | 3.80% p.a. (-5 bps) | $25,000 - $10,000,000 | End of term |
| 6 Months | 4.00% p.a. (-15 bps) | $25,000 - $10,000,000 | End of term |
| 7 Months | 3.95% p.a. (-10 bps) | $25,000 - $10,000,000 | End of term |
| 9 Months | 3.85% p.a. (-5 bps) | $25,000 - $10,000,000 | End of term |
| 12 Months | 3.80% p.a. (-10 bps) | $25,000 - $10,000,000 | End of term |
AMP Bank is back to wield the axe on its term deposit rates just a week after its previous cut.
Returns on terms ranging from three months to one year were reduced by as much as 20 basis points, including the bank's seven-month TD, which was boosted last week.
AMP Bank's top six-month rate is now down 15 bps to 4.00% p.a.
Deposits below $25,000 (but at least $5,000) get a slightly lower rate than the rates shown above.
Other movers
Other term deposit changes this week
- Bank Australia varies term deposit rates by up to 15 bps; boosting 3-mo TDs and lowering 6-month.
- Qudos Bank varies 3- and 6-month term deposit rates by up to 15 bps.
- Gateway Bank cuts 3- to 12-month term deposit rates by up to 10 bps.
- People's Choice cuts term deposit rates by up to 10 bps
- Heritage Bank cuts term deposit rates by 10 bps
- Bank of Sydney cuts 3- and 6-month TDs by 5 bps
- MyState Bank cuts term deposit rates by as much as 45 bps.
- Police Bank cuts term deposit rates by up to 25 bps
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Looking to lock-in before further rate cuts? Below is a selection of competitive, primarily 6-month, rates in the market.
| Bank | Term Deposit | Interest Rate | Interest Frequency | Term | Automatic Rollover | Maturity Alert | Early Withdrawal Available | Minimum Deposit | Maximum Deposit | Notice Period to Withdraw | Account Keeping Fee | Online Application | Joint Application | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.35% p.a. | At Maturity | 6 months | $5,000 | $19,999 | – | – | |||||||||||||
5.20% p.a. | At Maturity | 6 months | $10,000 | $5,000,000 | – | – | |||||||||||||
5.15% p.a. | At Maturity | 6 months | $1,000 | $1,000,000 | – | – |
