Banks 'oversupplied with term deposits'

Aussies are so keen to save money in term deposits that many banks are oversupplied, something that has contributed to the recent slashing of interest rates, an expert has stated.

Speaking to the Daily Telegraph, Nomura banking analyst Victor German said the need for funding has been reduced due to the cautious approach to finances adopted by many people in the country.

Among the financial institutions to reduce rates for savers over the last two weeks are Westpac, ANZ and the National Bank of Australia.

"At this point in time the supply of deposits exceeds the immediate demand of the banks," Mr German stated.

Managing director of Mozo Rohan Gamble revealed that 37 out of 64 institutions surveyed had taken steps to cut their interest rates, which may mean going online to compare term deposits is increasingly important.

However, AMP chief executive Craig Dunn recently stated that the reductions are unlikely to have an impact on the short-term saving habits of Aussies.

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