Popular neobank Judo has lowered interest rates on its term deposit products in the wake of yesterday's RBA rate cut.
The Reserve Bank of Australia (RBA) cut the cash rate yesterday by 25 basis points to a new historic low of 0.50%, driving many lenders to slash their home loan rates accordingly.
While much of the media attention has been focused on whether banks will pass on the full 25 basis points to mortgage customers, deposit rates are also affected.
The March cash rate cut was somewhat unexpected until a few days prior, which is why many different banks, including Judo, actually raised deposit rates throughout February.
If you're considering locking your money away in a term deposit before the next RBA rate cut, check out the below selection of high interest rate term deposits for a one-year term:
But following yesterday's announcement, Judo has been quick to cut some of its deposit rates by up to 10 basis points today.
Judo's three month and nine month deposit terms were cut by 10 basis points to 1.80% p.a. and 1.90% p.a. respectively.
Terms over one year were unaffected, meaning Judo still has some highly competitive interest rates of:
- 2.05% p.a. for two years
- 2.15% p.a. for three years
- 2.25% p.a. for four years
- 2.35% p.a. for five years
These interest rates are still comfortably ahead of competitors' rates.
Term deposit rate changes tend to be announced sporadically throughout the month, rather than immediately after the RBA's announcement as what happens with the majority of home loan lenders.
Not too many banks have announced deposit rate cuts as of yet, but expect many more to follow.
With most banks' deposit rates now barely sitting above inflation (with most now at or below it), there is a real chance this new rate cut has the potential to affect the pockets of those who rely on cash to get by.
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