It was a more subdued week for rate activity ahead of next Tuesday's RBA board meeting to determine the cash rate for December. Many pundits have it at another 25 basis point rise, which would bring it to 3.10%.
Focusing on the one-year term deposit space, a couple of smaller banks pushed their rates up to or above the 4.00% p.a. threshold (interest paid at maturity).
Credit Union SA
Credit Union SA pushed its one-year rate up by 25 basis points to 4.30% p.a.
The minimum deposit is $5,000.
This ties it with Illawarra Credit Union as the top rate in the one-year space according to InfoChoice's product database.
Credit Union SA's minimum deposit, however, is $95,000 less.
Bank of Sydney
Bank of Sydney pushed its one-year rate up by 20 basis points to 4.00% p.a.
The minimum deposit is $1,000.
Top one-year term deposit rates - 2 December
| Bank | % Rate Per Annum | Min Deposit |
| Credit Union SA | 4.30 | $5,000 |
| Illawarra Credit Union | 4.30 | $100,000 |
| Judo | 4.25 | $1,000 |
| AMP | 4.20 | $25,000 |
| Gateway Bank | 4.20 | $1,000 |
AMP cuts longer-term rates - a sign of things to come?
This week, on top of axing one- and two-month term deposits entirely, AMP lowered interest rates on four- and five-year term deposit products.
They were lowered by up to 30 basis points - the five-year rate with a minimum deposit of $25,000 is now 4.65% p.a. for example.
However, despite the reductions, AMP remains one of the most competitive in the five-year term deposit space.
Only Judo has it pipped, according to InfoChoice's product database, with a rate of 4.95% p.a. and a minimum deposit of $1,000.
Term deposits are essentially like fixed-rate home loans in that the bank prices-in what they think the markets will be doing in three, four or five years' time.
A lowering of rates now could signify the banks are betting that wholesale funding rates and the RBA cash rate won't be as high as previously anticipated.
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