Term deposit rates dip again despite unchanged cash rate

ANZ and Judo Bank are among the key players to lower rates across a range of personal, business, and specialised term deposit products.

With interest rates on a surprising hold this July, all signs point to a likely RBA rate cut in August. Banks that trimmed term deposit rates ahead of the Reserve Bank’s latest meeting were likely anticipating a cut that ultimately didn’t eventuate. Others have made adjustments more recently, potentially positioning for a future rate cut.

Mark Zukerman, Funds Management Director at Vado Private, says the RBA’s rate hold hasn’t eased the squeeze on Australians watching their cash savings and term deposits deliver shrinking returns amid rising living costs.

“Even though the central bank has held interest rates steady this month, the big banks have been reducing interest rates on term deposits this year, so much so that the real rate of return on some term deposits is now negligible after inflation,” Mr Zukerman said.

“For those relying on term deposits for income on which to live or to build wealth, the drop below 3% p.a. for average term deposit rates means Australians’ hard-earned money is working less for them, which could put at risk their savings goals and financial independence,” he added.

With a potential RBA rate cut expected in August, experts encourage term deposit holders carefully review their savings and investment strategies and stay alert to any rate changes from their banks.

ANZ lowers Advance Notice term deposit rates

ANZ has trimmed rates across its Advance Notice term deposit products by 10 basis points on Wednesday, bringing its highest rate down to 3.80%. 

The reductions apply across all payment frequency options, including end-of-term, semi-annual, quarterly, and monthly, with the monthly option now offering 3.76%.

This adjustment comes despite the RBA keeping rates steady in July, contrary to earlier predictions. ANZ was the last of the Big Four banks to anticipate a rate cut that ultimately did not happen.

Judo Bank delivers back-to-back deposit rate cuts

Judo Bank takes the axe out once more, cutting term deposit rates by up to 10 basis points. The 6-month rate was trimmed by 5bps, bringing its new top offer down to 4.35% p.a.

Business and SMSF term deposits weren’t spared either, with fresh reductions echoing last week’s downward move.

Other movers

• Great Southern Bank cuts rates on its term deposit and Platinum Plus 55+ term deposit by as much as 25 basis points.
• After last week’s sizable 40 bps drop, Bank of Sydney has made a further modest cut of 5 basis points to personal and business term deposit rates.
  
• Australian Military Bank trims interest rates by 25 basis points across its Investment Plus, Teen Plus, and Income Plus accounts.
• Heritage Bank slashes its term deposit rates by as much as 20 basis points, offering a new peak rate of 4.15% p.a. on its four-month term.
• Bank Australia has reduced several of its short-term deposit rates, with the most significant cut at 25 basis points. A 5 bps cut to the six-month rate sees the new top offer set at 4.15%.
• People’s Choice lowers its term deposit by 15 basis points, with the new rate coming in at 4.15% p.a.
• The Capricornian has reduced rates by up to 35 basis points across its Premium Choice Fixed, Investor Premium Choice Fixed, and Lifestyle Fixed deposit products.
• QBank varies rates, increasing by up to 30 basis points on 3-month terms, and decreasing on 6-, 9- and 12-month terms by 15 basis points.

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