The South Australian financial institution hiked its seven-month term deposit by 20 basis points to reach 5.25% p.a., the current top rate on offer across all terms according to the InfoChoice database.
That happening only a few days ahead of RBA’s second monetary policy meeting for the year seems bold, especially at a time when banks and lenders are moving interest rates down amid sustained expectations of cash rate cuts.
But there is also some sense to it.
With soft inflation data, a high unemployment rate, and weak GDP results, all major bank economists forecast no change in cash rates next week and until at least the third quarter.
CBA and Westpac are pencilling in a first rate cut in September, while those at ANZ and NAB have their money in November.
If the forecasts are correct, that puts us between six and eight months away from the cash rate moving down from 4.35%.
Credit Union SA’s move this week places it in the middle of the battle for market share while avoiding the risk of being locked into paying top rates once the easing cycle begins.
However, save for Credit Union SA and one more notable player hiking rates, the overall movement among term deposit providers was down.
These are the banks we saw adjusting their term deposit rates this week ending 15 March:
New market-leading rate offered by Credit Union SA
Credit Union SA’s 5.25% p.a. offering on its seven-month term deposit has earned the bank its crown as the current market leader.
The bank’s offering puts it 10 basis points ahead of the next best rate offered by Defence Bank (also for the seven-month term deposit) and Gateway Bank (six-month term deposit).
Among its products, the next best rate Credit Union SA offers is 4.80% p.a. for deposits on nine-month and one-year terms.
The second top rate the bank offers would have been for its five-month term deposit if it hadn’t slashed its rates by 80 basis points this week, leaving it at 4.20% p.a.
Macquarie Bank drops rates again
For the second time this month, Macquarie Bank slashed another 5 basis points from its six-month term deposit to bring its rate to 4.70% p.a.
The bank’s six-month TD has been on a rollercoaster rate ride since the beginning of the year, going up 5 bps twice and down by 5 bps three times.
But this week’s adjustments were applied to across a wide range of Macquarie’s products, whose rates went down by as much as 10 basis points.
|
Term length |
Change |
New rate |
|
Three months |
-5 bps |
4.80% p.a. |
|
Six months |
-5 bps |
4.70% p.a. |
|
Nine months |
-5 bps |
4.65% p.a. |
|
One year |
-5 bps |
4.65% p.a. |
|
Two years |
-5 bps |
4.35% p.a. |
|
3-5 years |
-10 bps |
4.25% p.a. |
Judo Bank lifts 6-month term deposit rates
Judo Bank has rejoined market leaders this week following a 10-basis-point boost to its six-month term deposits.
With a 5.10% p.a. offering, the challenger bank is now only 5 bps below the current top rate offered by Gateway Bank.
Since leaving its top rate behind in 2023, Judo Bank has also been tinkering with its term deposit rates, moving them up and down since the year started,
|
Term length |
Change |
New rate |
Payment frequency |
|
Six months |
10 bps |
5.10% p.a. |
End of term |
|
Six months |
10 bps |
5.00% p.a. |
Monthly |
Challenger Bank drops rate on 1-year term deposit
Following its former top-rate-peer G&C Mutual Bank's move to lower its one-year term deposit rate last week, Challenger Bank has followed suit, albeit at a more modest 5-basis-point decrease.
Despite this week’s adjustments, the digital bank’s one-year term deposit rate of 5.15% p.a. remains the current market-leading rate, followed only by Judo Bank and Bank SA’s 5.10% p.a. offering.
Challenger Bank also dropped the rate offered on its two-year deposit by 5 basis points to 4.70% p.a.
Other term deposit rate droppers
- BCU Bank lowered the rate on its eight-month term deposit paying at maturity by 20 basis points to 4.70% p.a.
- Arab Bank applied a 10-basis-point cut across its products on nine-month and one-year terms.
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