Term deposit premium rates are falling
The banks are tightening the squeeze on depositors as they adjust to sluggish lending by reducing the premium above wholesale money market rates that they've been paying on term deposits from 1.25 per cent at the start of the year to 0.75 per cent now.
Banks are no longer desperate to pull in more money, as potential home buyers are showing an aversion to debt. The cost of borrowing offshore for the banks has also dropped.
Source: The Age