Yay! Some banks are raising term deposit rates!

Last week, the Reserve Bank of Australia decided to leave official interest rates on hold at 1.5 per cent. That may have disappointed some savers, investors and retirees who have been living with low interest rates on their cash deposits for years. However, since the RBA decision, some banks and credit unions have taken matters into their own hands and given savers a boost. Term deposit rates may finally have turned the corner and be heading up. And there could be more good news on the way.

New bank funding rules are due to be introduced in July 2017. The new rules require banks to favour stable deposits that can’t be withdrawn instantly. That means that term deposit investors can expect term deposit rates to keep improving this year. A savvy investor might consider splitting their cash into separate term deposits of varying lengths so they can get the best rates as they become available.

But it’s not all good news. Some banks have lowered their term deposit rates in the last few weeks. Term deposit rates change regularly so savers and investors need to keep on top of the market and be prepared to shift their money to other institutions to get the best rates available at any particular time.

Which banks are increasing term deposit rates?

Westpac has increased term deposit rates by 0.05 per cent on its range of terms from 90 days (three months) through to five years. Westpac’s one year term deposit rate is now 2.50 per cent. Westpac’s six month term deposit rate is now 2.20 per cent.

Westpac’s subsidiary bank brand St George Bank has also increased term deposit rates by 0.05 per cent across its whole range of terms. St George’s six month term deposit rate is now 2.30 per cent and the one year term deposit rate is not 2.60 per cent.

ANZ Bank has increased rates on longer term deposits. ANZ’s three and four year TD rates have increased 0.40 per cent to 2.60 and 2.70 per cent respectively.

Which banks are cutting term deposit rates?

National Australia Bank has cut one and two year term deposit rates by 0.5 per cent. NAB’s one year rate is now 2.60 per cent and the two year rate is now 2.70 per cent.

Bankwest has cut some of its term deposit rates including its three, six and twelve month rates by 0.05 per cent. Bankwest’s online term deposit for six months is now paying 2.65 per cent. Bankwest’s one year term deposit is also now paying 2.65 per cent.

What are the best term deposit rates now?

In February 2017, the best retail term deposit rates on the most popular terms that are now available in Australia are:

The best three month term deposit rate is:

Firstmac and Your Credit Union are paying 2.75 per cent on three month terms.

The best six month term deposit rate is:

Firstmac, Your Credit Union and ME are paying 2.75 per cent on six month terms.

The best one year term deposit rate is:

Teachers Mutual Bank and UniBank are paying 3.0 per cent on one year terms. ME is paying 2.90 per cent.

The best two year term deposit rate is:

People’s Choice Credit Union, Qudos Bank and St George Bank are all paying 3.10 per cent for two year term deposits.

You can compare all term deposit rates here.

Source:InfoChoice.com.au

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