Huge gaps appear between savings rates

A burst of competition in the savings deposit market is producing massive differences in the highest and lowest rates available over some terms. Infochoice data shows the range of 12-month term deposit rates, for example, is currently a massive 5.5 percentage points – from 6 per cent down to just 0.5 per cent.

One of those to lift rates is Power Credit Union, offering a 13-month term deposit at 6 per cent for balances of $5000 and over, with interest paid on maturity. Power's rate is at the current high water mark for savings rates, along with Randwick Credit Union's 12-month term deposit rate and BankWest's 12-month introductory ‘at call' and term deposit rates.

Power says that in the light of the confusing number of choices now available to savers, they should not put the decision over where to put their money in the too-hard basket and leave their savings in an everyday account.