Are term deposit rates on the path to 5%?

With further cash rate increases tipped to close out the year, term deposit rates for periods greater than three years could soon be on their way to the 5.00% p.a. mark.

RBA retail deposit data for July details the average retail term deposit rate for 3-years currently sits at 1.45% p.a.

To put this into perspective, a number of banks are now offering rates nearly 300 basis points higher than this average.

As the battle between savings rates and term deposits continues to heat up, these term deposits are presented as a secure place to store savings in the medium-term away from the uncertainty of riding the cash rate wave. 

Judo Bank increases term deposit rates by up to 30 basis points

Judo Bank looks well on its way to reach the 5.00% p.a. destination first, having increased personal deposit rates by up to 30 basis points over the past week. 

Judo Bank's range of term deposits require a minimum deposit of $1,000 with interest paid either monthly, annually or end of term.

Taking the cake was the bank's 3-year rate, increasing by 30 basis points to 4.30% p.a. with interest paid end of term. 

Key changes also include:

• 4-year term deposit, paid end of term: 25 basis point increase to 4.40% p.a.
• 5-year term deposit, paid end of term: 25 basis point increase to 4.50% p.a. 

Macquarie Bank increases term deposit rates by 10 basis points

Macquarie Bank made two incremental 0.05% changes to term deposit rates this week, following Judo Bank reclaiming the 1-year deposit rate crown late last week.  

For one of Australia's largest banks outside of the big-four, Macquarie's 12-month term deposit, paid annually, increased to 3.60% p.a. 

Macquarie Bank term deposits require a minimum deposit of $5,000. 

Bank of Queensland increases term deposit rates by up to 50 basis points

Bank of Queensland (BOQ) increased term deposit rates by up to 50 basis points this week across its 12-month term deposit products.

Similarly to Macquarie, BOQ term deposits require a minimum deposit of $5,000 with interest paid either monthly or at the end of term.

BOQ's 7-month term deposit (interest paid at the end of term) increased to 3.00% p.a. while the bank's 12-month term deposit (interest paid annually) increased to 3.30% p.a. 

Citi increases term deposit rates by up to 25 basis points

Citi increased term deposit rates by up to 25 basis points this week across its 9-month term deposit products.

Citi term deposits require a minimum deposit of $1,000 with interest paid either annually or at the end of term.

Citi's 9-month term deposit (interest paid at the end of term) increased to 3.00% p.a. while the bank's 12-month term deposit (interest paid annually) increased to 3.50% p.a. 

Community First Credit Union increases deposit rates by up to 135 basis points

Offering the largest term deposit increase over the past week, the mutual bank increased deposit rates by up to 135 basis points. 

Community First's range of term deposits require a minimum deposit ranging from $5,000 to $100,000 with interest paid either monthly or annually.

Key increases include: 

• 12-month term deposit with $5,000 minimum, paid annually: 80 basis point increase to 2.30% p.a.
• 2-year term deposit with $50,000 minimum, paid annually: 115 basis point increase to 2.50% p.a.
• 3-year term deposit with $100,000 minimum, paid annually: 135 basis point increase to 2.70% p.a.

See also: Why are mutual banks becoming competitive in the deposit space? 

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Term Deposit - 6 months

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Minimum deposit$5,000

5.00%Interest rate p.a.

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