Term deposit market remains competitive

31/01/2011

In the term-deposit market the sweet spot for savers looks to be 180-day terms. Infochoice lists close to 30 institutions that are offering six per cent or more on six-month terms. Bank of Queensland has the top 180-day rate, at 6.45 per cent, followed by RaboDirect (6.4 per cent), Laiki Bank (6.3 per cent), Heritage Building Society (6.25 per cent) and MyState Financial (6.2 per cent).

Since the beginning of the year, rates on three, six and 12-month terms have gone up by as much as 100 basis points. Infochoice lists more than a dozen institutions that have raised term deposit rates since the start of the year. A couple of the big banks have had to realign their TD rates to meet the
market. Westpac added 235 basis points to its 180-day rate on January 21, taking it to six per cent. St George Bank has added 240 basis points to its 180-day rate.

Commonwealth Bank added 230 basis points to its nine-day rate on December 21, taking it to 5.5 per cent. With at-call and six-month term rates on a par, savers will have to take a bet on whether they think rates will go up in the first half of the year.

Source: Banking Day