Comments on: Term Deposit rate war declared

By: Robyn

Robyn — Mon, 22 Mar 2010 02:44:41 +0000

Last year St George bank advertised six months interest free on balance transfers. I transfered my credit card balance fron Commonwelth Bank.
last month a new charge started to appear on my St George credit card statement, along with ” interest on purchases” and ” edinterest on cash advances ” appear ” interest on special.
Noone at St George can explain it.
My guess is it is interest being charged for the non interest period.

By: Andrew Duncanson

Andrew Duncanson — Thu, 11 Feb 2010 00:47:40 +0000

Thanks for your comment, sharatq.

You’re right, there was quite a bit of competition for deposits back in 2008 as well. But during 2009 there was a definite shift in emphasis from deposits to lending – and I’m measuring that by the volume of changes banks were making to their interest rates and their eagerness to sign up new accounts. And in late 2009 we saw the activity shift back to deposits again.

The Westpac rate in December was the first really big statement from one of the Big 4 in this phase of the market. But of course, it was also a bit of a smokescreen for their big home loan rate increase later that same day!

By: sharatq

sharatq — Fri, 05 Feb 2010 09:28:06 +0000

I don’t think the deposit war is “emerging”

It started to occur in 2008 as the meltdown occurred and there was a flight to quality, with major lenders and smaller regionals battling for more stable deposit based funding.

The only difference is at the time the central bank was cutting, but it was extremely competitive even back then.

That has continued as Australian interest rates have risen, which is why you probably perceive it to be new, because the differences are now more acute.

By no means is it emerging.