Summary:
Major banks, ex-market leaders cut term deposit rates.With CommBank, Macquarie, Heartland Bank and numerous others among the latest term deposit rate casualties, returns above 4.50% p.a. are becoming increasingly rare.
This week brought a fresh round of TD rate reductions from the major banks, not to mention a few ex-market leaders.When lenders cut home loan rates you can rest assured they will also move to reduce their cost of funding, so the onslaught shouldn’t come as a surprise to even the most optimistic of term deposit enthusiasts.TD rates beginning with a 5 are now extinct. The benchmark for a quality return is becoming 4.50% p.a. with a few products that still crack this threshold after the latest cuts.
CBA, NAB and Macquarie Bank were the biggest names of this weeks round of term deposit rate cuts. Australia’s biggest bank slashed basically its entire range to all now sit well below 4% p.a. – with the exception of its latest special offer rate of 4.10% p.a. for one year. That rate is available for a limited time, exclusively to existing retail or business banking customers, and is 0.30% lower than the one year rate at G&C Mutual Bank (4.40% p.a.).
NAB went further, with its highest rate now just 4.00% p.a. for seven month terms after widespread cuts. At Macquarie, three, four, and six month rates were on the chopping block, taking its top rate down to 4.20% p.a. for three months.
Elsewhere, Heartland Bank cut its six month rate down to 4.55% p.a., nine month down to 4.40% p.a..Gateway Bank was another ex-heavy hitter to cut, although the 0.05% cut still leaves its top products among the strongest on market, as we touched on above.
Other movers:
- Qudos Bank cut rates by up to 60 bps, leaving a new top rate of 4.15% p.a. for six month terms Community First Bank and;
- Police Bank also cut.
Exhibit 1- Highest Term Deposit Rate by Term
Term deposit rates by Institution
| Institution | 1 month | 2 month | 3 month | 4 month | 5 month | 6 month | 9 month | 1 Year | 2 Year | 3 Year | 4 Year | 5 Year |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ANZ | 1.25 | 1.45 | 2.9 | 3.05 | 3.15 | 3.2 | 3.4 | 3.9 | 3.65 | 3.1 | 3.1 | 3.1 |
| Commonwealth Bank | 1.25 | 1.5 | 2.9 | 3.1 | 3.15 | 3.2 | 3.4 | 3.9 | 3.75 | 3.5 | 3.5 | 3.5 |
| NAB | 1.25 | 1.45 | 2.9 | 3.05 | 3.15 | 3.2 | 3.4 | 3.9 | 3.8 | 2.9 | 2.9 | 2.9 |
| Westpac | 1.25 | 1.45 | 2.75↓ | 2.90↓ | 3.00↓ | 3.05↓ | 3.30↓ | 3.75↓ | 3.50↓ | 3.00↓ | 3.00↓ | 3.00↓ |
| Military Bank | 3.4 | 4.2 | 4.3 | 4.55 | 4.2 | 4.25 | 3.8 | 3.8 | ||||
| AMP Bank | 0.1 | 0.2 | 4.35 | 4.4 | 4.5 | 4.5 | 4.2 | 4.05 | 3.7 | 3 | 3 | 3 |
| Arab Bank Australia | 1.25 | 1.25 | 4.05 | 3.9 | 3.9 | 4.6 | 4.1 | 3.9 | 3.6 | 3.5 | 3.5 | 3.4 |
| Bank of Melbourne | 1.25 | 1.45 | 2.75↓ | 2.90↓ | 3.00↓ | 3.05↓ | 3.30↓ | 3.75↓ | 2.80↓ | 2.90↓ | 2.90↓ | 2.90↓ |
| Bank Australia | 4.35↓ | 4.35 | 4 | 4 | 3.8 | 3.8 | ||||||
| BankSA | 1.25 | 1.45 | 2.75↓ | 2.90↓ | 3.00↓ | 3.05↓ | 3.30↓ | 3.75↓ | 2.80↓ | 2.90↓ | 2.90↓ | 2.90↓ |
| Bankwest | 2 | 2 | 3.75 | 3 | 4.2 | 4 | 3.8 | 3.8 | 3.6 | 3.6 | 3.75 | 3.75 |
| Bank of Sydney | 1.25 | 1.5 | 4 | 3.5 | 3.5 | 4.4 | 4.1 | 4.1 | ||||
| BankVic | 3.6 | 4 | 4.5 | 4.3 | 3.7 | 4.2 | 4 | 4 | 4 | 4 | ||
| Beyond Bank | 4.3 | 4.15 | 3.9 | 3.85 | 3.6 | 3.5 | 3.5 | 3.5 | ||||
| Bendigo Bank | 1.25 | 1.5 | 2.9 | 3.4 | 3.1 | 3.8 | 3.7 | 3.6 | 2.95 | 3 | 3 | 3 |
| BOQ | 0.75 | 0.8 | 2.25 | 4.25↓ | 1.25 | 4.25↓ | 4.10↓ | 3.90↓ | 3.3 | 3.3 | 3.3 | |
| BOQ Specialist | 4.25↓ | 4.30↓ | 4.40↓ | 4.20↓ | 4.00↓ | 3.5 | 3.5 | 3.5 | 3.5 | |||
| Great Southern Bank | 1.3 | 1.6 | 4.25 | 4.55 | 4.35 | 4.5 | 4.05 | 3.9 | 3.6 | 3.4 | 3.4 | 3.4 |
| Defence Bank | 4 | 3.6 | 3.7 | 4.1 | 4.1 | 4.2 | 3.75 | |||||
| Greater Bank | 1 | 1 | 3.95 | 3.95 | 3.95 | 4.35 | 3.8 | 4 | 3.5 | 4 | 3.5 | 3.5 |
| Heritage Bank | 1.15 | 1.4 | 3.85 | 4.25↓ | 3.5 | 4.10↓ | 3.95 | 3.90↓ | 3.75↓ | 3.60↓ | 3.60↓ | 3.60↓ |
| Horizon Credit Union | 1.25 | 1.5 | 3.60↓ | 3.60↓ | 4 | 3.90↓ | 3.80↓ | 3.60↓ | 3.6 | |||
| HSBC | 1.85 | 2 | 4 | 3.5 | 3.5 | 3.9 | 3.9 | 3.9 | 3.5 | 3.5 | 3.5 | 3.5 |
| IMB | 4.35 | 4.25 | 4 | 3.75 | 3.75 | 4 | 4 | |||||
| ING Direct | 4.35 | 4.25 | 4.25 | 4.15 | 4.05 | 3.8 | ||||||
| in1bank | 3.85 | 3.9 | 4.45 | 4.4 | 4.3 | 4.25 | 4.1 | 3.95 | 3.85 | |||
| Judo Bank | 4.35↓ | 4.45↓ | 4.25↓ | 4.15↓ | 4.05↓ | 4.05↓ | 4.35↑ | 4.45↑ | ||||
| Macquarie Bank | 2.1 | 2.1 | 4.25 | 4.2 | 4.1 | 3.9 | 3.8 | 3.6 | 3.65 | 3.8 | 3.8 | |
| ME Bank | 0.75 | 0.8 | 2.25 | 4.25↓ | 4.30↓ | 4.40↓ | 2 | 2 | 2 | 2 | 2 | 2 |
| MyState Bank | 0.5 | 0.5 | 4 | 4.2 | 4.4 | 4.4 | 4.1 | 4 | 3.75 | |||
| Newcastle Permanent | 1 | 1 | 3.95 | 3.95 | 3.95 | 4.35 | 3.8 | 4 | 3.5 | 4 | 3.5 | 3.5 |
| People's Choice Credit Union | 1.4 | 3.85 | 4.25↓ | 3.5 | 4.10↓ | 3.95 | 3.90↓ | 3.75↓ | 3.60↓ | 3.60↓ | 3.60↓ | |
| Police Bank | 4.1 | 3.75 | 3 | 4.25 | 4.5 | 4.45 | ||||||
| P&N Bank | 1.6 | 4.3 | 4.15 | 4.50↑ | 4 | 3.9 | 4 | 4 | 4 | 4 | 4 | |
| RACQ Bank | 0.55 | 1.6 | 4.15↓ | 3.5 | 3.5 | 4.20↓ | 4.00↓ | 4.00↓ | 3.3 | 3.3 | 3.3 | 3.3 |
| Rabobank Australia | 2 | 2.1 | 4.30↓ | 4 | 4 | 4.15↓ | 4.05 | 4.00↑ | 3.80↑ | 3.8 | 4.25↑ | 4.40↑ |
| Rural Bank Limited | 4.3 | 0 | 0 | 4.15 | 3.9 | 3.85 | 3.6 | 3.5 | 3.5 | 3.5 | ||
| St.George Bank - Except VIC | 1.25 | 1.45 | 2.75↓ | 2.90↓ | 3.00↓ | 3.05↓ | 3.30↓ | 3.75↓ | 2.80↓ | 2.90↓ | 2.90↓ | 2.90↓ |
| Suncorp Bank | 1.3 | 1.9 | 3.8 | 4.25 | 3.45 | 4.35 | 3.9 | 3.85 | 3.35 | 3.35 | 3.35 | 3.35 |
| Teachers Mutual Bank | 4.4 | 4.25 | 4.05 | 4.6 | 4.3 | 4.3 | 3.8 | 3.8 | ||||
| The Capricornian | 3 | 3.25 | 3.8 | 3.7 | ||||||||
| Bank First | 0.75 | 1 | 4.25 | 4.25 | 4.4 | 4.25 | 4.15 | 3.8 | 3.8 | 3.8 | 3.8 |