Summary:
The term deposit bloodbath rages on with more returns further dropping, though a sliver of good news for savers is delivered by a few hikes squeezing into this three-day workweek.
From Tuesday to Thursday, several rates dropped in unison with the recent dip in the Australian share market (down roughly 3% year-on-year to Wednesday) and growing expectations of further rate cuts by the RBA.
As of 23 April, more than half (62%) are pricing in a 50-basis point cut in the RBA Board meeting next month, with as many as four further cuts forecast by year’s end.
But even before all this, yields on term deposit have been steadily trending downward. Data from the RBA shows one-year term deposit rates fell to 4.00% p.a. in March, down from 4.45% p.a. a year ago. Three-month rates slid from 3.50% p.a. to 3.00% p.a. Interest rates across all maturities average at 3.20% p.a. in March.
At the risk of sounding like a broken record, it does look like the days of TDs paying an interest rate of over 5% are firmly behind us. Currently, the highest term deposit rate in our database is 4.80% p.a., which is still better than the average bonus savings account rate, which sits at 4.55% p.a. per RBA.
Notable weekly moves include:
- BoQ cuts term deposit rates by up to 20 bps. Bank of Queensland trimmed the rates on some of its short- to medium-term deposits by up to 20 basis points. The top term deposit rate at the bank is still available through its 6-month TDs – though at a lower rate than last week – 4.40% p.a. paid at maturity. Customers who prefer to get their interest earnings monthly get 4.30% p.a. rate on the same product following this week’s adjustments.
- ME Bank lowers term deposit rates by 10 bps. Following in the footsteps of Bank of Queensland, ME Bank cut term deposit rates. However, unlike its parent company, ME only touched its 4-, 5-, and 6-month TDs, applying a uniform 10 basis point cuts across. If you’re comparing rates for a 6-month term deposit between the two banks, ME’s 6-month term offers a higher rate than BoQ’s equivalent product – 4.50% p.a. versus 4.40% p.a.
- HSBC drops term deposit rates up to 50 bps. HSBC Bank made sweeping cuts to its longer-term fixed deposits, with drops of up to 50 basis points. The smaller 15 bps reduction on 12-month terms may reflect near-term caution, while the deeper cuts on longer terms suggest HSBC expects rates to fall further over the coming years.
- Bankwest cuts term deposit rates up to 20 bps. CBA-backed Bankwest dropped the axe across its range of term deposit products. Cuts range from 10 to 20 basis points, bringing some of the bank’s TDs down from 4.00% p.a. mark. Bankwest’s 5-month term deposit, which currently offers the highest rate available from the bank, was also not spared from the latest rate drops, down to 4.20% p.a. (-20 bps).
Other movers
- BCU Bank varies term deposit rates up to 50 bps; mostly dropping rates while hiking 3-, 4-, and 8-month products
- Australian Mutual Bank lowers term deposit rates up to 45 bps; hikes 5-month TDs by 75 bps
- Summerland Bank cuts term deposit rates up to 15 bps
- Bank of Sydney lowers term deposit rates by 10 bps
- Illawarra Credit Union slashes 6-month term deposit special by 50 bps
Term deposit rates by Institution
| Institution | 1 m nom | 2 m nom | 3 m nom | 4 m nom | 5 m nom | 6 m nom | 9 m nom | 1 Year | 2 Year | 3 Year | 4 Year | 5 Year |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ANZ | 1.25 | 1.45 | 3 | 3.05 | 3.15 | 3.3 | 3.5 | 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 | 3 | 3.05 | 3.15 | 3.3 | 3.5 | 4 | 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 | 3.5 | 4.3 | 4.45 | 4.65 | 4.5 | 4.45 | 3.8 | 3.8 | ||||
| AMP Bank | 0.1 | 0.2 | 4.35 | 4.4 | 4.45 | 4.4 | 4.2 | 4.05 | 3.7 | 3 | 3 | 3 |
| Arab Bank Australia | 1.25 | 1.25 | 4.05 | 3.9 | 3.9 | 4.6 | 4.3 | 4.1 | 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 | 3.30↑ | 3.50↑ | 3.90↑ | 3.05↓ | 3.05↑ | 3.05↑ | 3.05↑ |
| Bankwest | 2 | 2 | 3.75 | 3 | 4.20↓ | 4 | 3.80↓ | 3.80↓ | 3.60↓ | 3.60↓ | 3.75 | 3.75 |
| Bank of Sydney | 1.25 | 1.5 | 3.25 | 3.5 | 3.5 | 4.4 | 4.2 | 4.2 | ||||
| BankVic | 3.6 | 4 | 3.7 | 4.45 | 3.7 | 4.2 | 4 | 4 | 4 | 4 | ||
| Beyond Bank | 4.55 | 4.4 | 4.15 | 4.1 | 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 | 4.40↓ | 4.20↓ | 4.00↓ | 3.30↓ | 3.3 | 3.3 | |
| BOQ Specialist | 4.40↓ | 4.45↓ | 4.50↓ | 4.40↓ | 4.10↓ | 3.5 | 3.5 | 3.5 | 3.5 | |||
| Great Southern Bank | 1.3 | 1.6 | 4.30↓ | 4.55↓ | 4.45 | 4.6 | 4.15↓ | 4.00↓ | 3.6 | 3.4 | 3.4 | 3.4 |
| Defence Bank | 4 | 3.6 | 3.7 | 4.10↓ | 4.10↓ | 4.20↓ | 3.75 | |||||
| Greater Bank | 1 | 1 | 4 | 4 | 4 | 4.65 | 4 | 4.45 | 4 | 4 | 4 | 4 |
| Heritage Bank | 1.25 | 1.5 | 3.95 | 4.65 | 3.6 | 4.45 | 4.35 | 4.25 | 4.1 | 3.9 | 3.9 | 3.9 |
| Horizon Credit Union | 1.25 | 1.5 | 3.7 | 3.7 | 4.1 | 4.5 | 4.3 | 3.7 | 3.6 | |||
| HSBC | 1.85 | 2 | 4 | 3.5 | 3.5 | 3.9 | 3.9 | 3.90↓ | 3.50↓ | 3.50↓ | 3.50↓ | 3.50↓ |
| IMB | 4.2 | 4.5 | 4.25 | 3.75 | 3.75 | 4 | 4 | |||||
| ING Direct | 4.25 | 4.25 | 4.5 | 4.3 | 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 | 4.75 | 4.8 | 4.65 | 4.5 | 4.3 | 4.2 | 4.2 | 4.25 | ||||
| Macquarie Bank | 2.1 | 2.1 | 4.35 | 4.25 | 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 | 4.6 | 4.6 | 4.4 | 4.25 | 3.95 | |||
| Newcastle Permanent | 1 | 1 | 4 | 4 | 4 | 4.65 | 4 | 4.45 | 4 | 4 | 4 | 4 |
| People's Choice Credit Union | 1.5 | 3.95 | 4.65 | 3.6 | 4.45 | 4.35 | 4.25 | 4.1 | 3.9 | 3.9 | 3.9 | |
| Police Bank | 4.1 | 3.75 | 3 | 4.25 | 4.5 | 4.45 | ||||||
| P&N Bank | 1.6 | 4.30↑ | 4.15↑ | 4.10↓ | 4.00↓ | 3.90↓ | 4.00↓ | 4.00↓ | 4.00↓ | 4.00↓ | 4.00↓ | |
| RACQ Bank | 0.55 | 1.6 | 4.85 | 3.5 | 3.5 | 4.65 | 4.4 | 4.4 | 3.9 | 3.5 | 3.5 | 3.5 |
| Rabobank Australia | 2 | 2.1 | 4.45↓ | 4 | 4 | 4.35↓ | 4.05↓ | 3.85↓ | 3.60↓ | 3.8 | 4.15 | 4.3 |
| Rural Bank Limited | 4.55 | 0 | 0 | 4.4 | 4.15 | 4.1 | 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 | 3.9 | 4.4 | 3.45 | 4.55 | 4 | 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 | 4 | 4 | ||||||||
| Bank First | 0.75 | 1 | 4.35 | 4.35 | 4.5 | 4.35 | 4.25 | 3.8 | 3.8 | 3.8 | 3.8 |