After a busy couple of weeks, there wasn't widespread TD rate movement this week, with no substantial change to the outlook for the coming months.
Term deposit enthusiasts who are yet to lock in are like a blackjack player sitting on 15: you could stand and take advantage of the strong rates available at providers like Heartland or Judo Bank, or you could hit and wait to see what happens in the coming weeks.
One of those top options was ripped away this week, with a major cut from the previously market leading G&C Mutual Bank
The date circled on the calendar of every TD fan is 31 July, when the ABS is set to drop the CPI inflation results for the June quarter.
While monthly inflation numbers for April and May have been released, the RBA tends to rely on the more comprehensive quarterly figures to see how inflation is tracking.
If the macro data prompts more hawkish rhetoric from the RBA or even another rate hike, those gamblers might be reward with even stronger rates, but if (as mortgage holders hope) inflation is moderating, they are in danger of missing out on the rates available at the moment.
For the time being, these were the major rate changes in the week past:
G&C Mutual cuts up to 30 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Nine months | $1,000-$99,999,999 | End of term | 5.05% p.a (-0.25) |
| Nine months | $1,000-$99,999,999 | Monthly | 5.00% p.a (-0.25) |
| One year | $1,000-$99,999,999 | End of term | 5.10% p.a (-0.30) |
| One year | $1,000-$99,999,999 | Monthly | 5.05% p.a (-0.30) |
In news that might be a bitter blow for those who missed out, G&C Mutual has taken its market leading 5.40% p.a on one year term deposits off the table.
This was probably always the plan - collect up a bunch of deposits for the month or so the rate is on offer, then cut - but it's still sad to see.
At 5.10% p.a for one year, G&C is still reasonably competitive, but 25 bps behind the now once again market leading Heartland Bank.
Bank of Sydney cuts up to 25 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $1,000-$1,000,000 | End of term | 4.65% p.a (-0.10) |
| Six months | $1,000-$1,000,000 | End of term | 4.75% p.a (-0.05) |
| Seven months | $1,000-$1,000,000 | End of term | 5.20% p.a (-0.05) |
| Nine months | $1,000-$1,000,000 | End of term | 4.75% p.a (-0.25) |
Last week, Bank of Sydney boosted rates on its seven month term product by 15 basis points, but it now seems like someone got a bit overexcited, with that rate cut back slightly this week.
At 5.20% p.a, that rate is now 10 bps behind the 5.30% p.a on offer at Heartland Bank for six month terms.
Elsewhere, the nine month product also had rates slashed by 25 bps, dropping to 4.75% p.a, which means Bank of Sydney is now 50 bps behind Judo at nine months.
Other movers
- Credit Union SA hiked two year terms 80 bps to 4.80% p.a.
- imb Bank hiked rates up to 10 bps
- Illawarra Credit Union hiked up to 120 bps, including a new rate of 5.10% p.a on one year terms.
- BankWest hiked rates up to 25 bps
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Want to earn a fixed interest rate on your cash? The table below features term deposits with some of the highest interest rates on the market for a six-month term.
Picture by Ben White on Unsplash
William Jolly
Brooke Cooper
