Why are term deposit rates less than savings rates
Australian Prudential Regulation Authority chairman Wayne Byres questioned why banks and credit unions are offering higher rates on at-call savings accounts over term deposits.
Byres is rolling out new banking rules to strengthen lenders by making them keep more safe long term capital. Those rules favour deposits that can’t be readily withdrawn.
Byers said the growth in ¬at-call deposits rather than term ¬deposits in recent years suggested the banks might have been strengthened less than it might first appear.
A recent APRA study suggested the big four’s capital ratios may need to rise, requiring billions of extra dollars. That may be good news long term for savers and people who love the safety and government guaranteed certainty of term deposits.