Term deposit rates move in different directions in the wake of RBA pause

It appears the Reserve Bank’s statement on ruling nothing out – not a rate hike nor a cut – given the risks still looming above its “priority to return inflation to target” has opened a field for fiddling with term deposit rates. 

Three of Australia’s four major banks surely made this week pretty interesting. 

NAB led this week’s droppers, decreasing the rates on its term deposits. Westpac, on the other hand, decided to boost its deposit products with a big hike.

ANZ, which made varied repricing changes to its term deposit products, argued the RBA’s post-meeting statement took a step in a dovish direction (versus December) but nonetheless retained an albeit watered-down tightening bias. 

“At this point in the cycle, where the economy and inflation dynamics have turned, the RBA’s language on the policy stance will likely lag economic developments and market pricing,” ANZ research team said. 

“We think the Board will want to be very confident that inflation is coming back to the band in a sustainable fashion before changing its rhetoric. That might explain the tone of the post-meeting statement versus the forecasts.”

While the RBA keeps its options open, these banks adjusted their rates in anticipation of the central bank’s next move. 

NAB cuts term deposit rates up to 20 basis points

NAB, which previously predicted a February rate hike before revising it down to a hold, slashed the rates on its six-month, seven-month, and one-year term deposit products. 

Earlier this week, the bank’s head of market economics Tapas Strickland reiterated its forecast that RBA won’t begin cutting its rates in the first half of this year, “but a cut in [the second half of] 2024 is consistent with inflation at target by mid-2026 on the RBA's forecasts”.

Westpac bolsters term deposit rates 

Following the boost in special offer term deposits available at Westpac Group’s brands last week, the banking giant upped the rates on its deposit products by as much as 93 basis points to bring them near 5.00% p.a. 

The eight-month term deposit receiving payments monthly and at maturity will now receive 4.78% p.a. after this week’s increase. 

Interest rates on its 11-month deposit products also went up 70 basis points to 4.70% p.a.

ANZ varies Advance Notice term deposits

In a move that appears to reflect RBA’s stance amid softening inflation, the Melbourne-based banking giant boosted its shorter-term deposit products by up to 63 basis points, while slashing those with longer-term length by as much as 20 bps.  

Judo Bank brings term deposit rates further down

Judo Bank has moved further away from its former top rate and the current market-leading rate after it once again made a few rate drops on its term deposit products.

The neobank slashed 5 basis points across various term deposits. Its current top rate after this week’s repricing is now 5.00% p.a., available for nine-month and one-year TDs paid annually and at the end of term. 

Macquarie Bank drops term deposit rates 

Macquarie slashed the rates on its one- and two-year term deposits paid annually by 5 basis points, leaving them at 4.70% p.a. and 4.40% p.a., respectively. 

Bank of Queensland, ME Bank lower rates

Bank of Queensland (BOQ) moved its term deposit rates further down south after lowering them a few weeks earlier. 

These are the changes on the bank’s deposit products paid at the end of term:

BOQ’s subsidiary ME Bank made similar adjustments this week. 

The bank slashed 10 bps off its seven-month TD, leaving it at 4.75% p.a. The 5 bps cut on its eight-month term deposit brought its interest rate down to 4.80% p.a.

ME Bank also lowered the rates offered on its one-year term deposits by 15 bps to 4.75% p.a.

Other movers

• AMP Bank lowered term deposit rates by as much as 75 basis points.
• Summerland Bank decreased fixed term deposit rates by 5 basis points.
• Bank Australia varied term deposit rates by up to 20 basis points.
• Heritage Bank varied term deposit rates by a maximum of 70 basis points
• BCU Bank bolstered rates on standard term deposits by 30 basis points.

Read more: Term Deposit News RBA Big 4

Bernadette Lunas

Finance Journalist

Bernadette is a journalist with years of experience covering topics in macroeconomics, real estate, and lifestyle beats for notable print media organisations. She joined the InfoChoice Group in 2024, bringing her passion for writing stories that help Australians make better decisions about money.

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