This week in banking - A longtime holdout finally hikes its rates

Niko Iliakis

Friday 25 January 2019

Term deposits, home loans and rewards credit cards. It’s certainly been another busy week in the world of Australian banking. Here's a run-down of the latest ups and downs across the financial landscape.

Term deposits dropping, with one big exception

As we mentioned last week, there’s a strong belief that the Reserve Bank is going to cut the cash rate, and banks are starting to price that into their term deposits.

  • The biggest cuts were made by Macquarie Bank, whose suite of term deposits have decreased by up to 25 basis points.
  • Citibank has made very minor adjustments, dropping term deposit rates by 1-4 bp.
  • IMB Bank has shuffled their rates around, raising their three and six month rates by 10 bp, while slashing their four month rate from 2.45% p.a. to 1.50% p.a.

One bank, however, is bucking the trend. On Tuesday, MyState Bank made some serious changes to its term deposits rates, raising them by as much as 125 bp. It currently has some of the highest rates around, so if you’re in the market for a term deposit, you’d better take a look.

Home loan shake-up

The big news in home loans this week is NAB’s decision to finally raise its rates. The bank was the only one of the big four to resist a rate hike, holding firm since September of last year.

The change will come into effect January 31, with rates set to increase up to 16 bp. This will put NAB in similar territory with the other big banks, who offer rates of between 5.36% and 5.38%.

Other banks' variable home loan rates continue to rise, as Bendigo Bank, and RACQ Bank have all made adjustments to their offerings.

ProviderWhat's changedPrevious valueNew value
Bendigo BankHome Equity Loan (Investor, from $5,000 to $500,000)6.24% p.a.6.46% p.a.
Variable Rate Residential (Investor, Principal & Interest, from $5,000)5.89% p.a.6.11% p.a.
Variable Rate Residential (Investor, Interest Only, from $5,000)6.34% p.a.6.51% p.a.
RACQ BankMortgage Saver Special (Owner Occupier, Principal & Interest, from $20,000)3.62% p.a.3.69% p.a.

But there are still pockets of good news. AMP has dropped the variable rates for its Line of Credit (Professional Package) and Variable Rate Loan (Professional Package) by as many as 20 bp.

Rounding out home loan news:

  • CUA has dropped the fixed rates for its two and five year fixed rate home loans.
  • Resi has raised its discharge fees for all home loans from $295 to $495.

Rewards cards

The Amplify brand rewards credit cards offered by Bank of Melbourne, BankSA and St. George have undergone some slight changes. Some bad, some good:

  • The standard Amplify Platinum card no longer offers zero fees in the first year.
  • It does, however, give you the chance to grab 50,000 bonus Amplify Points in the first year, plus a further 50,000 in the second year when you spend at least $6,000 each year on eligible purchases.
  • The Amplify Platinum Qantas Frequent Flyer and Amplify Signature cards now offer 0% p.a. balance transfer rates for the first six months.
  • The Amplify Signature card offers 100,000 bonus points in the first year, plus a further 100,000 in the second year when you spend at least $12,000 on eligible purchases each year.

And if all this talk of bonus points has piqued your interest, check out the list of high quality rewards credit cards we've compiled.

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