TD rates come off the boil
The term deposit market may be at a turning point, with as many falls in rates as rises so far this month. Longer rates have been cut hardest, with three to five year rates coming off by as much as 60 basis points. Since May long term bond and swap rates have come off by 60 to 100 basis points. This trend finally started to feed into the retail market towards the end of last month when Macquarie Bank and a number of credit unions started making small cuts in their term deposit rates.
The biggest mover to date has been Citibank. On July 7 the bank cut its one year rate by 17 basis points, its two year rate by 50 points, its three year rate by 62 points, its four year rate by 64 points and its five year rate by 66 points. BankWest cut its five year rate by 20 basis points on July 10. A number of credit unions have made small cuts this month. The traffic is not all one way: ING Direct, Bendigo Bank and several credit unions have put up their term deposit rates in recent weeks.