Mutuals, or customer-owned banks, are owned and operated with the sole purpose of providing banking services to members, rather than the traditional banking model of generating a profit. In essence, this means customer interests are not conflicting with shareholder interests.

With mutual banks placing the customer in the limelight, profits are used to benefit the customer by offering competitive rates, fairer fees, responsible lending and improving customer service.

Why are mutual banks coming to the party with competitive deposit rates?

Speaking to Savings.com.au, Customer Owned Banking Association (COBA) CEO Michael Lawrence said there are many differences between customer-owned banks and the major banks, with one of the most important being that mutuals are driven to create customer value instead of maximising investor returns. 

“This translates into highly competitive product offerings, including term deposits and savings rates,” Mr Lawrence said.

“Being close to their communities, customer-owned banks are keen to ensure their products and services meet the needs of their members, whether it be a young couple saving for their first home, or a retiree looking to carefully manage their money.

“Customer-owned banks are also funded overwhelmingly by household deposits rather than from wholesale funding markets, so our sector always aims to attract those savings through competitive rates on term deposits, savings accounts, and transaction accounts.”

In recent times, the likes of G&C Mutual Bank, People’s Choice, BankVic and many more have all passed on significant term deposit increases to savers, with the potential for more to come.

Mr Lawrence noted a range of factors influence rate decisions by customer-owned banks, including balancing the needs of borrowers and depositors to give all a fair deal.

“What isn’t required is the need to squeeze borrowers and depositors to pay dividends to shareholders,” he said.

The rise of the appeal of mutual banks

As Aussies look to make their money go further, the offerings of mutual banks are fast becoming too hard to ignore. Mutual banks are regarded as being socially responsible lenders, committed to communities as well as environmental sustainability and financial literacy.

Mr Lawrence said customer-owned banks are designed to support their members first and foremost.

“With a history of teachers lending to teachers, police lending to police, or localised lending within a region, by saving with a customer-owned bank you are investing in your community,” he said.

“As entities owned by their members, customer-owned banks reinvest profits to deliver better products and services and support the communities within which they exist.”

Who are the largest mutual banks in Australia?

According to July 2022 ADI statistics from APRA, the largest mutual banks are:

Institution

Assets (billion)

Great Southern Bank (CUA)

$21,357

Heritage Bank

$14,365

Newcastle Permanent

$13,950

People’s Choice

$12,013

Bank Australia

$11,353

Teacher’s Mutual Bank

$10,411

Greater Bank

$10,246

Beyond Bank

$9,858

P&N Bank

$8,745

IMB

$8,717


Looking to earn a fixed interest rate on your cash? The table below features customer-owned bank term deposits with some of the highest interest rates on the market for a 12-month term. 

Provider

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

Term Deposit (> $1000) - 12 months

    At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]
    More details
    • Guaranteed rate of return
    • Manage your term deposit online
    • $0 monthly account fee

    Term Deposit - 12 months

    • Guaranteed rate of return
    • Manage your term deposit online
    • $0 monthly account fee
    Monthly, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]
    More details

    Term Deposit ($5000-$49999) - 12 months

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

      Term Deposit ($1000+) - 12 months

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

        Term Deposit ($5000-$999999) - 12 months

          Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]
          More details

          Term Deposit Special - 12 months

            At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]200031$product[$field["value"]]$product[$field["value"]]
            More details

            Term Deposits ($2k-$50k) - 12 months

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

              Member Term Deposit ($1000-$499999) - 12 months

                Important Information and Comparison Rate Warning

                All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of May 26, 2024. View disclaimer.

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