Commonwealth Bank, NAB and Westpac were the biggest names among the many TD providers to alter rates this week.
On the whole there was more movement up than down, but there were still a couple of notable rate cuts, including the once market leading Bank of Sydney.
This week also saw the release of the jobs numbers for June, which showed a slight uptick in the unemployment rate from 4% to 4.1% despite more than 50,000 new Aussies in work.
Seasonally-adjusted figures have been choppy of late, with the more reliable trend figure steady at 4.0%.
Gareth Aird, head of Australian Economics at CBA, said this does not support a cash rate increase in August, but also would "not stand in the way" of a hike if the June quarter inflation numbers are sufficiently strong.
Inflation could also be a major determining factor in how TD rates unfold over the coming months - another upside surprise could see new challenges to Heartland Bank, which remains the market leader at 5.30% p.a for six months and 5.35% p.a for one year terms.
These were the notable term deposit rate changes in the week gone:
CommBank launches new special offer rate
| Term length | Deposit size | Payment frequency | Interest rate |
|---|---|---|---|
| One year | $5,000-$1,999,999 | End of term | 4.90% p.a |
From 15 July, Australia's largest bank has been offering a rate of 4.90% p.a for one year terms.
This special offer is exclusively available to existing SMSF or personal CBA banking customers and will be only be for a limited time.
The official base case prediction for the future of the RBA cash rate from CBA remains that rates have peaked, with the first cuts to fall in November, but Mr Aird says this will depend on how prices unfolded from April to June.
"An outcome of 1.1% [quarterly inflation] or above would mean an August rate hike is more likely than not," he said.
NAB boosts rates 10 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| One year | $5,000-$1,999,999 | End of term | 4.90% p.a (+0.10) |
| One year | $5,000-$1,999,999 | Monthly | 4.80% p.a (+0.10) |
NAB boosted returns by 10 bps to now offer the highest unconditional rate of the big four.
Coincidentally or not, NAB is also the big four bank with the latest call for rate cuts - chief economist Alan Oster says the RBA isn't likely to ease monetary policy until well into next year.
"[Cuts] may be in hand by February, but we see May, after the Q1 2025 CPI, as most likely," Mr Oster said last month.
CommBank varied normal TD rates 5 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Eleven months | $5,000-$1,999,999 | End of term | 4.05% p.a (-0.05) |
| One year | $5,000-$1,999,999 | End of term | 4.60% p.a (+0.05) |
CommBank also boosted the rate on its regular one year term deposit product, available to all of Australia, but top returns are a more moderate 4.60% p.a.
If you don't currently bank with CBA, you'd currently get an extra 0.30% return on a one year fixed investment with NAB.
Westpac cuts rates 5 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Three months | $5,000-$2,000,000 | Monthly | 3.45% p.a (-0.05) |
| Six months | $5,000-$2,000,000 | Monthly | 3.70% p.a (-0.05) |
| Nine months | $5,000-$2,000,000 | Monthly | 3.95% p.a (-0.05) |
| One year | $5,000-$2,000,000 | Monthly | 4.20% p.a (-0.05) |
It wasn't all up from the big four, with Westpac trimming a range of products by 5 basis points.
The top rates at Westpac (with interest paid at the term's conclusion) remain untouched - one year terms for example still return 4.25% p.a.
The highest currently available rate at Westpac is 4.80% p.a on its special offer 11 month term, but like CBA, this is only available to existing customers.
Macquarie varies rates 5 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Six months | $5,000-$1,000,000 | End of term | 4.85% p.a (-0.05) |
| One year | $5,000-$1,000,000 | End of term | 5.00% p.a (+0.05) |
While NAB now has the rest of the big four covered, it remains behind several of the other big players that have cracked the 5% mark.
This week, Macquarie joined other big boppers ING, Suncorp, Bank of Queensland and HSBC in offering a term deposit rate starting with the magic number 5.
That means five of the top ten banks in Australia (by customer deposits) have cracked the 5% threshold, which you should keep in mind if you're looking at a TD with CBA, Westpac, NAB, ANZ or Bendigo.
That's just the other big banks as well - once you start looking at what's on offer at the likes of Judo Bank or Heartland, a term deposit with the big four could make even less sense.
Great Southern Bank varied rates up to 215 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Five months | $5,000-$99,999,999 | End of term | 5.10% p.a (+2.10) |
| Six months | $5,000-$99,999,999 | End of term | 4.90% p.a (-0.30) |
| Eight months | $5,000-$99,999,999 | End of term | 5.10% p.a (+2.05) |
| Nine months | $5,000-$99,999,999 | End of term | 4.75% p.a (-0.45) |
| Eleven months | $5,000-$99,999,999 | End of term | 5.15% p.a (+2.00) |
| One year | $5,000-$99,999,999 | End of term | 4.85% p.a (-0.35) |
Great Southern Bank (GSB) pivoted its strategy this week, shifting the emphasis away from round term lengths (three months, six months, nine months, one year).
The top rates at GSB are now on five month, eight month and eleven month products, which is slightly unusual - the only term lengths under a year at Judo bank for example are three, six and nine months.
This might be a deliberate strategy - these fresh rates from GSB are all near market leading for these less common terms, so could be ideal for customers saving for a specific timeframe.
For example, if you've got a wedding to pay for in November, a five month TD with GSB is among your strongest fixed investment options.
Bank of Sydney varied rates up to 70 bps
| Term length | Deposit size | Payment frequency | Interest rate (Change) |
|---|---|---|---|
| Six months | $1,000-$1,000,000 | End of term | 5.10% p.a (+0.35) |
| Seven months | $1,000-$1,000,000 | End of term | 4.50% p.a (-0.70) |
Other movers
- MyState Bank hiked rates up to 295 bps, including a top rate of 5.10% p.a on seven and eight month terms.
- People's Choice Bank and Heritage Bank put rates up by up to 20 bps, hitting 5% p.a on six month terms.
- Beyond Bank boosted rates up to 15 bps
- Summerland Bank hiked 5 month terms 100 bps to a top rate of 5.00% p.a.
- Gateway Bank cut its 6 month rate by 5 bps to 5.20% p.a.
- Bank of Us revealed a new 5.10% p.a. rate for 11 month terms.
- MOVE Bank varied rates up to 30 bps.
- Hume Bank boosted rates up to 65 bps, including 5% for one year terms.
- St George, Bank of Melbourne and BankSA cut rates 5 bps.
Advertisement
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 from NAB media
Staff Writers
William Jolly
