Term deposits rates not sustainable – get in now

11/12/2009

One question being asked in the finance industry is how long can term deposit rates remain as high as they are right now.

Queensland Police Credit Union chief executive Grant Devine said: “Westpac’s 6.8 per cent for a 12-month term deposit is not sustainable, and you have to ask whether these rates are being driven by competition for funds or driven by a desire to get rid of competition and become more dominant.

“We are well placed currently and have a growing membership, but the challenge for the smaller mutuals is always the funding side of it and maintaining liquidity.

“The big question now in this sector is how long is this price war going to continue? How long can term deposit rates stay above standard variable mortgage rates?”

Teachers CU is also offering very competitive rates on high-interest savings accounts and term deposits, including a rate of 7.05 per cent for three years.

Source: The Sheet

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