Westpac, ANZ and NAB all cut TD rates this week, leaving the vast majority of products at the big four now returning below 4% p.a.
Considering a few months ago the top special offer rates at the major banks exceeded 4.50% p.a., these latest cuts paint a sorry picture of the TD market.
Long term observers however will know the big banks are almost never among the heavy hitters as far as top TD rates go - and there were several green shoots among the smaller providers that tend to offer the highest returns.
Another cash rate cut at the July monetary policy meeting (now less than three weeks away) could snuff out this spark of hope, although there have been a few noises recently that the RBA may decide to keep rates on hold in light of what's going on in the rest of the world.
It feels intensely solipsistic to be discussing the war between Israel and Iran in terms of Australian interest rates, but the fact is that if the conflict causes oil prices to spike, it could well mean added inflationary pressure here.
But RBA monetary policy can't exactly stop missiles being fired among the two countries.
In any case, here were the major term deposit rate changes over the week past:
Westpac Group cuts special offer rate
Westpac and its subsidiaries cut its top rate this week by 20 bps on the 11 month special offer rate.
The highest return at Westpac, St George, Bank of Melbourne and BankSA is now 3.90% p.a., although customers that renew online may be able to earn an extra 0.10% to take their rate to 4.00% p.a.
NAB cuts by up to 15 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| 6-7 months | $5,000-$2m | End of term | 3.05% p.a. (-0.10) |
| 8-9 months | $5,000-$2m | End of term | 3.25% p.a. (-0.10) |
| 9-10 months | $5,000-$2m | End of term | 3.30% p.a. (-0.10) |
| 11-12 months | $5,000-$2m | End of term | 3.40% p.a. (-0.10) |
| 13-23 months | $5,000-$2m | Annually | 3.55% p.a. (-0.10) |
| 2 years | $5,000-$2m | Annually | 3.50% p.a. (-0.15) |
After cuts last week from CommBank, Macquarie and ING, NAB and ANZ continued the slide for TD rates at the major banks.
NAB cut its range of products again this week, although its leading seven month rate was left untouched, albeit still at just 4.00% p.a.
All ANZ rates below 4%
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| 3-4 months | $5,000-$2m | End of term | 2.70% p.a. (-0.15) |
| 6-7 months | $5,000-$2m | End of term | 2.95% p.a. (-0.20) |
| 8-9 months | $5,000-$2m | End of term | 3.90% p.a. (-0.20) |
| 12-24 months | $5,000-$2m | Annually | 3.65% p.a. (-0.20) |
| 24-36 months | $5,000-$2m | Annually | 3.40% p.a. (-0.20) |
After these latest cuts, ANZ now officially offers no term deposit rates that begin with a 4.
Its top rate is 3.90% p.a. on eight to nine month terms - CommBank, Westpac and NAB all still have a single product with a 4% p.a. rate, although the way things are going this might change soon.
Heartland back at top of six month market
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| 3 months | $25,000+ | End of term | 4.40% p.a. (+0.05) |
| 6 months | $25,000+ | End of term | 4.55% p.a.(+0.05) |
| 9 months | $25,000+ | End of term | 4.30% p.a. (-0.05) |
| 2 years | $25,000+ | End of term | 3.80% p.a. (+0.05) |
There were three banks that shocked the TD market with rate hikes this week, and despite the increase only being a modest 0.05%, Heartland Bank's was arguably the most significant.
At 4.55% p.a., Heartland Bank is back at the summit of the six month market - level with Judo Bank and G&C Mutual Bank as the highest rate in our database.
Its new three month rate is also strong, just 0.05% behind Bank Australia (whose 4.45% p.a. rate is the highest three month return in our database) although for four months, Great Southern Bank is still offering 4.55%.
Bank of Sydney varies rates by up to 0.15%
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| 6 months | $1,000-$1,000,000 | End of term | 4.45% p.a. (-0.05) |
| 9 months | $1,000-$1,000,000 | End of term | 4.25% p.a. (+0.15) |
Bank of Sydney reduced its top rate (six months) this week, down 0.05% to 4.45% p.a., which is still just 10 bps from the highest rates in our database.
To compensate, the nine month rate got a tidy 0.15% boost, up to 4.25% p.a.
ME Bank varies rates by up to 195 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| 3-4 months | $5,000-$2m | End of term | 4.20% p.a. (+1.95) |
| 5-6 months | $5,000-$2m | End of term | 4.15% p.a. (-0.15) |
| 6-7 months | $5,000-$2m | End of term | 4.20% p.a. (-0.20) |
ME Bank seemingly shifted its focus this week, cutting its six month rate down to 4.20% p.a. while massively hiking three month returns to the same rate.
Other movers
- AMP Bank cut rates by up to 0.25%, leaving a new top rate of 4.30% p.a. for five or six month terms, with a deposit of at least $25,000.
- Gateway Bank cut nine month and one year terms 0.05% to 4.25% p.a. and 4.15% p.a. respectively.
- Regional Australia Bank cut rates by up to 0.30%, leaving a new top rate of 4.25% p.a. for four month terms, up to a max deposit of $500,000.
- People's Choice Credit Union cut rates by up to 0.20%.
- Northern Inland Credit Union cut by up to 0.15%
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Picture from NAB media
Denise Raward
Harry O'Sullivan
Harrison Astbury
Dominic Beattie
