Summary:
Big banks jump the gun on term deposit rate cuts ahead of RBA move. NAB and Westpac have led the latest wave of term deposit rate drops a few days ahead of the widely expected RBA cash rate cut. Economists anticipate Governor Michele Bullock and the RBA Board will announce another 0.25% cut to the nation’s key interest rate when the monetary policy meeting wraps up on 20 May. If the forecast plays out, the cash rate will fall to 3.85%.
More than half of traders surveyed by the ASX, on the other hand, are sticking with their view that a larger, half percentage point cut is on the table despite the surprise jobs data showing a surge in employment. The latest ABS labour force report, released Thursday, revealed a surge of 89,000 jobs in April – the largest monthly increase in over a year and far exceeding the 20,000-job consensus forecast.
NAB cuts term deposit rates by 10 basis points. NAB, signalling its confidence in a coming rate cut, preemptively trimmed rates on its flagship 7-month term deposit product. The bank shed 10 basis points from the 7-month term deposit, leaving the rate down to 4.10% p.a., currently NAB’s top term deposit rate and the only one starting at ‘4’. This rate is now 15 basis points down from when it was last raised just a little over a month ago.
Westpac follows with special offer cut. Unsurprisingly, fellow Big Four Westpac made the same basis point cut to its term deposit offering the highest rate. As it is, these major banks typically follow each other’s moves vis-a-vis rate adjustments. Westpac dropped the rates on its special offer TD with 11-month fixed term. This special offer term deposit is exclusively available to existing customers of the bank. Those opening or renewing online will receive a 0.10% p.a. bonus on top of the standard rate offered to those conducting their business in-branch.
St.George, Bank of Melbourne, BankSA cut rates in sync. Following in their parent bank’s footsteps, Westpac-owned St.George, Bank of Melbourne, and BankSA also applied a 10 basis point cut to their 11-month special offer TD. Its current rate is 4.10% p.a. Term deposit accounts opened or renewed online also get an additional 0.10% p.a. special bonus offer.
Judo Bank bets big on longer terms. Judo Bank took the heat out of its flagship rate – the 3-monther – this week, taking it down to 4.55% p.a. It was previously the highest rate at the bank – now that mantle belongs to the 6-month rate (4.60% p.a.). What’s notable is that Judo boosted rates on longer terms, taking them to comparatively very competitive rates. It marginally pips competitor Rabobank across these longer terms. Slightly lower rates apply if one opts for a more frequent interest payment.
Suncorp Bank cuts term deposit rates by up to 25 basis points. Suncorp Bank applied broad cuts across its range of short-term deposits. This week’s rate adjustments were applied to the bank’s 3-, 4-, 6-, and 9-month TD rates. Notably, the bank’s highest TD rate is now 4.40% p.a. for a 6-month term with a $1 million minimum deposit.
Rabobank joins the rate cut trend. Agribusiness bank Rabobank joined in on the rate-cutting action ahead of the RBA meeting next week, trimming up to 15 basis points off its term deposit rates.
Other movers:
· Teachers Mutual Bank and UniBank cut rates by up to 45 bps
· Community First Bank cuts term deposits by up to 30 bps
· Illawarra Credit Union cuts term deposit rates by up to 30 bps
· G&C Mutual Bank cut term deposit rates by up to 25 bps
· Beyond Bank cuts term deposit rates by 10 bps
· Summerland Bank cuts term deposit rates by 10 bps
Exhibit 1- Best term Deposit Rates
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 | 2.9 | 3.05 | 3.15 | 3.3 | 3.5 | 3.9 | 3.65 | 3.15 | 3.15 | 3.15 |
| 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 | 4.50↑ | 4.50↑ | 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 | 2.9 | 3.05 | 3.15 | 3.3 | 3.5 | 3.9 | 3.05 | 3.05 | 3.05 | 3.05 |
| Bank Australia | 4.45 | 4.35 | 4 | 4 | 3.8 | 3.8 | ||||||
| BankSA | 1.25 | 1.45 | 2.9 | 3.05 | 3.15 | 3.3 | 3.5 | 3.9 | 3.05 | 3.05 | 3.05 | 3.05 |
| 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 | 4.00↑ | 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 | 4.30↓ | 4.15↓ | 3.90↓ | 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 | 4.35 | 1.25 | 4.4 | 4.2 | 4 | 3.3 | 3.3 | 3.3 | |
| BOQ Specialist | 4.4 | 4.45 | 4.5 | 4.4 | 4.1 | 3.5 | 3.5 | 3.5 | 3.5 | |||
| Great Southern Bank | 1.3 | 1.6 | 4.25↓ | 4.55 | 4.35↓ | 4.50↓ | 4.05↓ | 3.90↓ | 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 | 4.45 | 3.5 | 4.25 | 3.95 | 4 | 3.9 | 3.7 | 3.7 | 3.7 |
| Horizon Credit Union | 1.25 | 1.5 | 3.7 | 3.7 | 4 | 4.3 | 4.1 | 3.7 | 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 | 4.7 | 4.6 | 4.45 | 4.3 | 4.2 | 4.2 | 4.2 | 4.25 | ||||
| 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 | 4.35 | 4.4 | 4.5 | 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 | 4.45 | 3.5 | 4.25 | 3.95 | 4 | 3.9 | 3.7 | 3.7 | 3.7 | |
| Police Bank | 4.1 | 3.75 | 3 | 4.25 | 4.5 | 4.45 | ||||||
| P&N Bank | 1.6 | 4.3 | 4.15 | 4.1 | 4 | 3.9 | 4 | 4 | 4 | 4 | 4 | |
| RACQ Bank | 0.55 | 1.6 | 4.5 | 3.5 | 3.5 | 4.55 | 4.2 | 4.2 | 3.3 | 3.3 | 3.3 | 3.3 |
| Rabobank Australia | 2.00↑ | 2.10↑ | 4.40↑ | 4.00↑ | 4.00↑ | 4.20↑ | 4.05↑ | 3.85↑ | 3.60↑ | 3.80↑ | 4.15↑ | 4.30↑ |
| Rural Bank Limited | 4.30↓ | 0 | 0 | 4.15↓ | 3.90↓ | 3.85 | 3.6 | 3.5 | 3.5 | 3.5 | ||
| St.George Bank - Except VIC | 1.25 | 1.45 | 2.9 | 3.05 | 3.15 | 3.3 | 3.5 | 3.9 | 3.05 | 3.05 | 3.05 | 3.05 |
| Suncorp Bank | 1.3 | 1.9 | 3.80↓ | 4.25↓ | 3.45 | 4.35↓ | 3.90↓ | 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 |