This week, term deposit providers ING and Judo Bank have walked further away from their market-leading rates on certain products.
It came just after a consensus among the Big Four – with NAB abandoning its forecast of another hike – has been reached that the cash rate will remain unchanged until late 2024.
Following RBA’s series of hikes since May 2022, the cash rate currently sits at 4.35%. A higher cash rate is better for depositors, as providers typically hoist their interest rates on offer in line with the central bank’s.
However, with the November Consumer Price Index (CPI) revealing slow inflation, economists forecast the cash rate has reached its peak and is likely to drop this year.
Though the recent data on unemployment and retail spending are now available, a lot still hinges on the December quarter CPI figures before the RBA board makes a decision on 5-6 February.
- The leading 12-month term deposit rate, according to InfoChoice's product database, belongs to Challenger Bank at 5.25% p.a. with interest paid at maturity
In the meantime, here are the latest movements in term deposit rates for the week ending 19 January.
ING abandons market-leading term deposit rate by dropping 20 basis points
Direct savings bank ING decided to pass on the crown for the leading 12-month term deposit, after slashing its offered rate by 20 basis points (bps) to 5.10% p.a.
The current rate applies to one-year term deposits paying interest annually and at maturity.
ING was previously among the market leaders for the said deposit product when its offered rate increased to 5.30% p.a. following RBA’s 25-bps rate hike in November.
On the other hand, ING bolstered rates on its deposit products ending on shorter terms by 20 bps.
|
Term length |
Change |
Interest rate |
|
Three months |
20 bps |
4.85% p.a. |
|
Six months |
20 bps |
4.85% p.a. |
|
One year |
-20 bps |
5.10% p.a. |
|
Two years |
-5 bps |
4.75% p.a. |
Judo Bank continues its rate-slashing series
Much like ING, only a few rate cuts ahead, Judo Bank left further behind its market-leading rate of 5.35% p.a. on 12-month term deposit – which lasted a good week – after slashing it again.
The challenger bank now offers customers a 5.15% p.a. return on its one-year term deposit.
Other products were not spared, as Judo Bank also lowered rates on deposits ending on shorter and longer terms by as much as 15 basis points.
|
Term length |
Change |
Interest rate |
|
Three months |
-5 bps |
4.95% p.a. |
|
Six months |
-10 bps |
5.05% p.a. |
|
Nine months |
-5 bps |
5.10% p.a. |
|
One year |
-5 bps |
5.15% p.a. |
|
Two years |
-15 bps |
5.00% p.a. |
|
Three years |
-10 bps |
5.00% p.a. |
|
Four years |
-10 bps |
5.00% p.a. |
|
Five years |
-10 bps |
5.00% p.a. |
G&C Mutual Bank hikes rate on 12-month term deposit
Customer-owned G&C Mutual Bank flipped the game on former market leaders after it hiked its interest rate on one-year term deposit by 20 basis points this week.
The bank, along with Bank of Australia and Qudos Bank, now offers customers 5.20% p.a. on 12-month deposits.
This is just 5 basis points off the pace of Challenger Bank's market-leading rate.
Term deposit holders receiving interest payments annually get the aforementioned rate, while those paid monthly receive 5.15% p.a.
However, depositors looking for a three-year term deposit will be holding the shorter end of the stick after G&C Mutual Bank slashed its rates by 40 bps – leaving it at 4.90% p.a. on those paying interest annually and 4.85% p.a., on those paying monthly.
BOQ lowers term deposit rates by up to 25 basis points
Bank of Queensland (BOQ) joined the rate cutting trend this week, slashing as much as 25 basis points on its term deposits paying interest monthly and at maturity.
The bank’s six- and nine-month term deposits bore the brunt of the drop, whose headline rates both now at 4.80% p.a.
The rate applies to depositors receiving interest payments at the end of term. Those paid monthly get a slightly lower 4.70% p.a. return.
BOQ’s subsidiary ME Bank also lowered its term deposit rates by up to 25 bps this week.
ME offers customers 4.85% p.a. on seven- and nine-month term deposits paying at maturity.
While 12-month term deposit holders are promised to be paid 4.95% p.a. interest rate at the end of term.
Other movers:
- Summerland Bank cut 20 basis points on rates offered on its range of two-year term deposits.
- For the second time this month, Firstmac slashed the rates on its 90-day term deposit – issued by Goldfields Money, a registered ADI – by 10 bps, leaving it at 4.80% p.a.
- Challenger Bank lowered its nine-month term deposit rate by 5 bps; one-year term deposit dropped by 10 bps.
