Newly-minted Heartland Bank’s foray in Australia has been fruitful for term depositors, as the bank continues to move its rates north to catapult itself to the top of the 6-, 9-, and 12-month markets. 

In case you didn’t know, Heartland Bank is the new trading name of Challenger Bank following the latter’s acquisition by New Zealand’s Heartland Bank Limited.

The institution until this point was probably better known for reverse mortgages.

Australia’s ninth-largest bank (in market cap), Bank of Queensland has also altered its rates to join the newly renamed Heartland and several other mutuals in the skirmish to market-leading status. 

This is good news for many Aussies who are planning to grow their savings once the additional cash from the Federal Budget’s cost of living measures rolls in. 

The latest Westpac-Melbourne Institute Consumer Sentiment Index found that 80% of Australians intend to save rather than spend the additional money they expect to have from the rebates and Stage 3 tax cuts. 

That’s 80 cents saved for every dollar received. 

If they follow through, it may stem the fears that the Albanese Government’s Budget will be inflationary. 

And we all know that if inflation is high, the cash rate will too. 

The RBA minutes of its May policy meeting have already made it clear that the Board has considered raising the cash rate before finally electing to leave it as is

Higher for longer cash rate could mean we may see more term deposit rates moving towards or north of 5% p.a. – just like these TDs that moved rates this week.

Bank of Queensland ups 1-year term deposits

Bank of Queensland (BoQ) applied a 15 basis point boost to its one-year term deposit products, bringing them closer to the 5% p.a. threshold. 

The bank, which holds over 2.29% of the nation’s total household deposits, now offers 4.95% p.a. returns on its 12-month term paying at maturity. 

This puts BoQ 35 basis points behind the current market-leading in the one-year term deposit space, Great Southern Bank. 

Although GSB’s 5.30% p.a. offer is exclusively available to customers aged 55 and over.

This means BoQ is 30 basis points behind the top rate – 5.25% p.a. – without the 55+ age requirement offered by Bank of Sydney and Judo Bank. 

To get this rate, the bank requires a minimum deposit of $5,000.

ME Bank hikes term deposit rates 

Bank of Queensland’s subsidiary has now entered the ‘5% club’ in the one-year term deposit market.

ME Bank’s one-year TD now offers a 5% p.a. return paid at maturity following a 15 basis point hike this week. 

The bank also lifted the rates on 9-month terms by 5 basis points to 4.90% p.a. (paid at maturity) and 4.85% p.a. (paid monthly). 

The minimum deposit is $5,000, and the maximum is $2 million. 

Heartland Bank also conquers the 6-month term deposit space

After rolling out the current top rate in the one-year term deposit market a fortnight ago, Heartland has returned this week to unveil the new top rate for six-month TDs. 

Up another 5 basis points, Heartland Bank now offers a 5.30% p.a. return on its six-month term deposit paying at maturity. 

New customers must have at least a $25,000 deposit to get this product while existing customers only need $5,000. 

The maximum deposit is $1 million. 

Move Bank leads the 7- and 10-month term deposit markets

Member-owned Move Bank is the current market leader in the less popular 7- and 10-month term deposit space following this week’s rate adjustments. 

  • 7 Month: Up 35 basis points to 5.25% p.a.
  • 10 Month: Up 45 basis points to 5.25% p.a.

The bank also lifted the rate on its 3-month term deposit to bring it up to 4.90% p.a., 10 basis points away from the current top rate offered by Bank of Sydney.

The required deposit size stretches from $5,000 to $2 million. 

Other movers this week

  • Gateway Bank applies another 5 basis point lift to its 6-month TD; now at 5.25% p.a.
  • Newcastle Permanent ups 6- and 12-month term deposit rates by 30 basis points
  • Greater Bank hikes rates on 3-, 6-, and 12-month terms by up to 30 basis points
  • Horizon Bank slashes up to 20 basis points on 3-, 6-, and 12-month term deposits

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