Two of the Big Four banks started the week with newly altered term deposit rates.
NAB, which currently ranks as the third-largest bank in household deposits, applied a 10 basis point boost across its one-year TD products.
The bank's top rate of 4.90% p.a. is currently the highest unconditional rate offered by any of the four majors on one-year terms.
Australia's largest bank - in all measures, including the size of household deposits on its books - also altered the rates on its term deposit products.
Commonwealth Bank on Monday launched a special offer rate of 4.90% p.a. on one-year TDs.
The limited-time offer is available on opened and renewed term deposits by existing personal or self-managed super fund (SMSF) customers only.
Keep in mind, special offers can be withdrawn at any time; CBA previously offered TD rates north of 5% p.a. in 2023 then withdrew them.
New customers and those excluded from the current offer may invest in the bank's newly boosted, albeit lower, unconditional rates on one-year term deposits.
CommBank offers 4.60% p.a. returns on 12-month term deposits ending at maturity, placing its unconditional rate 20 basis points behind ANZ's and 35 basis points above Westpac's.
While upping the fixed returns on its one-year TDs, the bank simultaneously lowered those on 11-month terms.
Previously number one among the Big Four peers, ANZ fell at the second spot with 4.80% p.a. returns on the same term.
Despite the boost, NAB's current top rate remains 45 basis points below the current market leader in this space, Heartland Bank with 5.35% p.a.
The average 12-month rate in InfoChoice's database is 4.80% p.a. - implying the big banks are pretty much bang on average.
Here are the new term deposit rates offered by NAB
|
Term length |
New rate (change) |
Deposit size |
Payment frequency |
|
One year |
4.80% p.a. (+10 bps) |
$5,000 - $1,999,999 |
Monthly |
|
One year |
4.80% p.a. (+10 bps) |
$5,000 - $1,999,999 |
Quarterly |
|
One year |
4.85% p.a. (+10 bps) |
$5,000 - $1,999,999 |
Semi-annually |
|
One year |
4.90% p.a. (+10 bps) |
$5,000 - $1,999,999 |
Annually |
Here are the new term deposit rates offered by CommBank
|
Term length |
New rate (change) |
Deposit size |
Payment frequency |
|
11 months |
4.00% p.a. (-5 bps) |
$5,000 - $49,999.99 |
Monthly |
|
12 months |
4.50% p.a. (+5 bps) |
$5,000 - $49,999.99 |
Monthly |
|
11 months |
4.00% p.a. (-5 bps) |
$5,000 - $49,999.99 |
Semi-annually |
|
12 months |
4.55% p.a. (+5 bps) |
$5,000 - $49,999.99 |
Semi-annually |
|
11 months |
4.05% p.a. (-5 bps) |
$5,000 - $49,999.99 |
End of term |
|
12 months |
4.60% p.a. (+5 bps) |
$5,000 - $49,999.99 |
End of term |
Further cash rate increase in the offing?
Market watchers keen to interpret every movement might view these latest adjustments in term deposit rates as a sign that these banks anticipate the cash rate to increase further or stay higher for longer.
Of course, anyone would likely want to have a crystal ball to predict the moves of the Reserve Bank's rate-setting committee.
However, term deposit rate movements are not solely influenced by the cash rate; market competition, customer demand, and market conditions can also move the needle that affects deposit returns.
As for the RBA's decision, a lot hinges on the upcoming Q2 CPI data due on 31 July, less than a week before the Board's next meeting.
CommBank chief economist Gareth Aird earlier said a core print north of 1% "would test the Board's resolve" not to tighten policy further.
Historically, barring Covid-19, the RBA is known to raise the cash rate whenever quarterly inflation accelerates by 1% or greater.
The economics team that Dr Aird heads at CommBank still maintains its rate cut call in November, though they said strong jobs data "would see us delay our November start date to the RBA easing cycle".
The ABS June unemployment figures will come out on 18 July.
NAB, which forecasts Q2 trimmed mean CPI to land at 1%, likewise believes the next RBA move will be hold on the back of "some cooling in the market" and soft activity growth.
"[Those] should be enough to keep a low bar of a return to target in 2026 in sight" NAB senior economist Taylor Nugent said, while admitting that may mean the rates will stay higher for a long time.
NAB earlier revised its rate cut call from November 2024 to May 2025, just a few weeks after ANZ broke ranks to reschedule its rate cut forecast to February next year.
Photo courtesy of NAB
