Banks cut TD rates, but that will change in 2017
In November and December 2016, some of Australia's biggest banks have reduced some of their term deposit rates. National Australia Bank has reduced interest rates for 6-month term deposits by 0.05 percentage points to 2.10 per cent. NAB’s highest term deposit rate is currently the three year option paying 3.15 per cent. St George Bank and its owner, Westpac Bank, have cut various term deposit rates for balances over $250,000. Rates for term deposits under that amount have remained steady. There have also been a couple of minor rate changes to at-call savings rates from NAB, Westpac owned banks and some smaller institutions.
2017 is set to be a good year for term deposits
Demand for term deposits is surging and that trend is set to continue and grow in 2017. The Reserve Bank of Australia recently reported that demand from Australian savers for term deposits is growing. New funding rules for banks that will come into force in 2017 favour stable deposits that can’t be withdrawn immediately and easily. That means that banks are likely to raise interest rates on their term deposit products while keeping their at-call savings account rates steady.
The only issue that could stop rates going up for savers in 2017 is the Australian economy. The board of the Reserve Bank of Australia is reportedly concerned at poor unemployment figures and a generally gloomy outlook for Australian workers in 2017. Many economists are now predicting that the RBA will keep official rates steady for most of 2017. The RBA is reportedly reluctant to cut rates further unless unemployment rises sharply in the new year.
The best term deposit rates in Australia now are:
Savers can get good rates on term deposits by shopping around and comparing deals. Right now the best rates in the term deposit market are:
The highest three month term deposit rate is 2.65 per cent from Bank of Sydney.
The highest six month term deposit rate is 2.65 per cent from ME Bank.
The highest two year term deposit rate is 2.80 per cent from ME Bank.
The highest five year term deposit rate is 3.20 per cent from RaboDirect and Greater Bank.
You can research and compare term deposits from all of Australia’s major banks and credit unions here.