Big banks boost savers with bigger term deposit rates

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on March 20, 2020
Big banks boost savers with bigger term deposit rates

Image source: Commonwealth Bank

Major banks have announced significant increases to term deposit interest rates, despite the Reserve Bank of Australia's emergency cash rate cut.

The Commonwealth Bank (CBA) yesterday announced it would be increasing its 12-month term deposit interest rate by 60 basis points, to a new interest rate of 1.70% p.a. 

NAB followed CBA's lead but bettered the offer, today unveiling a 10-month term deposit with an interest rate of 1.75% p.a.   

The table below displays one-year term deposits with some of the highest interest rates on the market. 

Lender

Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details

Personal Term Deposit - 12 months (Annually)

    At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]More details
    AUTOMATIC MATURITY ROLLOVER
    AUTOMATIC MATURITY ROLLOVER

    Term Deposit - 12 months

      At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]1000031$product[$field["value"]]$product[$field["value"]]More details

      Term Deposit - 12 months ($10k-$250k)

        Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]1000$product[$field["value"]]$product[$field["value"]]More details

        Term Deposit ($1000-$500001) - 12 months

          Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details
          EARLY WITHDRAWAL AVAILABLE
          EARLY WITHDRAWAL AVAILABLE

          Term Deposit (> $1000)- 12 months

            At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]500031$product[$field["value"]]$product[$field["value"]]More details

            Term Deposit - 12 months

              Rates based on a $50,000 deposit for 12 months. Rates correct as of June 29, 2022. View disclaimer.

              CBA's new term deposit rate is available from today for all eligible new and existing CBA personal customers on balances from $5,000 to $2 million, for a limited time only.

              “For our deposit customers, we will increase our 12 month term deposit rate by 60 bps to 1.70% p.a," CBA CEO Matt Comyn said. 

              "This will be available to all personal customers, but will especially benefit older Australians relying on their savings.

              "It will ensure all Australians are now able to earn a return on their savings which is more than 1.45% higher than the official cash rate."

              NAB's new term deposit rate will be available from March 24 for personal customers on balances between $5,000 and $2 million. 

              Westpac and ANZ are expected to make similar announcements later today. 

              While these new term deposit rates are comfortably now among the highest deposit rates offered by the big four, it's important to remember that 1.70% p.a is still fairly small in the grand scheme of things. 

              The current inflation rate is 1.80%, meaning any interest earned on this deposit would not earn customers any real return. 

              Other term deposit changes 

              Term deposit interest rates have been in freefall lately thanks to recent cash rate cuts - yesterday marked the first time in our history that the Reserve Bank of Australia (RBA) has cut the cash rate twice in a single month. 

              Just in the past couple of weeks, a host of major and larger banks have made sizeable cuts to their term deposit products, including:

              • UniBank and Teachers Mutual Bank decreasing term deposit rates by 25 basis points (20 March)
              • People's Choice Credit Union decreasing term deposit rates by up to 35 basis points (20 March)
              • BOQ decreasing term deposit rates by up to 55 basis points (20 March)
              • CUA increasing term deposit rates by up to 15 basis points (19 March), decreasing by up to 25 (12 March)
              • ING decreasing term deposit rates by up to 30 basis points (18 March) 
              • G&C Mutual Bank decreasing term deposit rates by up to 30 basis points (18 March)
              • Westpac, St. George, BankSA and Bank of Melbourne decreasing term deposit rates by up to 25 basis points (17 March) 
              • AMP increasing term deposit rates by up to 35 basis points (17 March)
              • MyState Bank increasing term deposit rates by up to 50 basis points (17 March)
              • Macquarie Bank decreasing term deposit rates by up to 15 basis points (16 March) 
              • Citi increasing term deposit rates by up to 16 basis points (16 March)
              • ANZ decreasing various term deposit rates by up to25 basis points (13 March)

              Some banks have increased various deposit rates, and these have been highlighted in bold. 

              The average term deposit interest rate, across all terms, has now plummeted to roughly 1.35% p.a, a truly dismal number considering where rates used to be not even a year ago. 

              Xinja savings account rate remains at 2.25% 

              Meanwhile, Xinja has reiterated to customers that it is not cutting its market-leading savings account interest rate following the RBA's emergency cash rate cut. 

              In an email to customers yesterday, the neobank's CEO Eric Wilson said Xinja's 'Stash' interest rate remains at 2.25% for now.

              "That’s not to say we won’t change it in the future (it is a variable rate) however not yet," Mr Wilson wrote in the email. 

              "We thought you’d like to know. We do hope you are doing ok through these strange & uncertain times."

              Xinja's Stash savings account remains closed to new customers after the neobank announced earlier this month it was pausing new applications to preserve its high interest rate for existing customers. 

              The table below displays a snapshot of available savings accounts with some of the highest non-introductory interest rates on the market. 

              Lender

              4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

              Online Saver (Amounts < $499999)

                4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                High Interest Savings Account (< $250k)

                  4001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                  Online Saver ($1-$100k)

                    0100$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                    Mighty Saver

                      000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                      Online Savings Account (<$250k)

                        4001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                        Lifestyle Account (< $75k)

                          000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                          Bonus Saver Account (Amounts < $100k)

                            Rates based on a savings balance of $10,000. Introductory bonus interest rate products not included. Sorted by total interest rates. Refer to providers' websites for bonus rate conditions. Rates correct as of June 29, 2022. View disclaimer.


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                            William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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