The latest series of cuts follow on from the cuts made in mid-August at the same time as the big bank released its full-year 2024 results.
It wasn't all bad news, as there were some hikes, namely to the 12- and 34-month rates.
This large series of cuts come despite the RBA and its governor Michele Bullock holding the cash rate steady on Tuesday, and maintaining that inflation is still much too high.
The window for a cash rate cut in 2024 is getting narrower, with two more meetings to go - 4-5 November, and 9-10 December.
November is the prime mover in this scenario, being the most popular month to alter the cash rate.
The RBA figures November is a perfect time, with the last two months of the year generally being the biggest spending months with both Black Friday and Christmas/Boxing Day coming into view.
Clearly the smartest guys in the room are seeing something we're not - CBA economists for a long while maintained the RBA would cut in November, and only recently moved that forecast to December.
Those at NAB, ANZ, and Westpac don't forecast as such until at least February 2025.
Traders are also seeing something in the tea leaves, with Australian Treasury yields lower - but the rate of falls has slowed compared to August.
All this feeds into retail products, with fixed-rate home loans broadly lower, and term deposits lower to act as a hedge against the lending ledger.
CBA Term Deposit Rate Changes - September 2024
| Term | New % Rate p.a. (Change) |
|---|---|
| 3 Months | 3.15% (-0.10) |
| 4 Months | 3.20% (-0.10) |
| 5 Months | 3.30% (-0.10) |
| 6 Months | 3.40% (-0.10) |
| 7 Months | 3.50% (-0.10) |
| 8 Months | 3.65% (-0.15) |
| 9 Months | 4.45% (-0.05) |
| 9 Month Special Offer | 4.75% (-0.05) |
| 10 Months | 3.80% (-0.10) |
| 11 Months | 3.90% (-0.10) |
| 12 Months | 4.40% (+0.40) |
| 24 Months (2 Years) | 3.75% (-0.05) |
| 34 Months | 3.75% (-0.15) |
| 36 Months (3 Years) | 3.50% (+0.10) |
| 48 Months (4 Years) | 3.50% (-0.10) |
| 60 Months (5 Years) | 3.50% (-0.10) |
The above rates are for deposit sizes of between $50,000 and $2 million; there is a 5 basis point reduction in the rate for deposit sizes between $5,000 and $50,000.
Interest on these particular rates is paid at maturity for terms shorter than 12 months, and annually for longer terms.
Again, there are slight reductions in the interest rate if one opts for a more frequent payment, such as bi-annually or monthly.
Photo supplied by CBA
