ANZ kicked the year off by slashing the rates for certain term deposits, while Credit Union SA and Westpac shook up the market with relatively mixed changes across their deposit products
Interestingly, these varied movements parallel the different forecasts of economists on the Reserve Bank of Australia’s (RBA) next move when the board meets in February.
As inflation eased to 4.3% in November, according to this week’s announcement, major bank economists expect the RBA to hold the cash rate steady.
NAB, however, maintains its position that another rate hike is coming next month, continuing the RBA’s 13 consecutive interest rate increases since May 2023.
“NAB continues to pencil in an additional hike in February,” senior economist Taylor Nugent said.
But NAB is tempering its expectations, noting the data flow may not push the RBA the same way it did in the lead-up to the November meeting and it will be up to the evaluation of risks.
While the market awaits the next policy board meeting, here are the latest term deposit rate movements of some of the notable market players.
ANZ slashes rates for Advance Notice product by 10 basis points
Things are looking different at ANZ, after it cut rates offered on its Advance Notice product with terms of 12-24 months.
Term deposits receiving interest at the end of term are paid 4.90% p.a., while lower rates are offered on deposits paying interest on monthly, quarterly, and semi-annually basis.
Credit Union SA cuts certain term deposit rates by up to 110 basis points
Credit Union SA made the biggest cut this week, slashing the rate on its three-month term deposit by 110 basis points to 4.00% p.a. with interest paid at maturity.
The rates on its five- and six-month deposit products are also lowered by 50 basis points, bringing them down to 4.00% p.a. and 4.30% p.a., respectively.
On the other hand, the news is better for seven-month term deposit holders, as Credit Union SA hiked the interest rate by 25 basis points to 5.05% p.a.
|
Term length |
Change |
Interest rate |
|
Three months |
-110 basis points |
4.00% |
|
Five months |
-50 basis points |
4.00% |
|
Six months |
-50 basis points |
4.30% |
|
Seven months |
25 basis points |
5.05% |
Westpac shakes up special term deposit rates
Westpac and its subsidiaries kicked off the first week of 2024 with varying changes in interest rates.
Westpac upped the special rate offered for its six-month term deposit by 10 basis points to 4.20% p.a.
At the same time, however, it dropped its special offer for 12-month deposits by 10 basis points to 4.90% p.a.
On the other hand, special rates for 12-month deposits at Westpac’s subsidiaries – BankSA, Bank of Melbourne, and St George – were up 10 basis points to 5.10% p.a.
Other movers
Australian Unity hiked the rate for its six-month term deposit product to 5.00% p.a., which is now only 15 basis points lower than current market-leading rates offered by Judo Bank and Gateway Bank.
Firstmac dropped the interest rates on certain term deposits – issued by Goldfields Money – twice in two weeks.
The institution first cut the rates on its 90-day, 180-day, and 12-month products to 4.90% p.a., 5.00% p.a., and 5.05% p.a., respectively, and once again slashed that of its 12-month deposit to 4.90% p.a.
BankVic lowered the interest rates on its six-, nine, and 12-month term deposits by up to 1.05%, while upping the rate on its four-month deposit at the same time this week.
Photo by Sebastian Davenport-Handley on Unsplash
