Mozo Money Moves: Term deposits in freefall, 476 cuts logged as ‘5s’ disappear

After a short hiatus – thanks to the Easter gift of multiple long weekends – we are back with a bumper edition of Mozo Money Moves.

This week, the quarterly inflation data gave borrowers a nice post-Easter present, offering some reassurance that a May rate cut is the most likely outcome of the next RBA monetary policy meeting.

On Monday, NAB cut its term deposit rates, taking three of the Big Four banks’ 1 year term deposit rates to the 3% range. They joined 476 term deposit cuts Mozo observed in April, ahead of an expected cash rate cut in May from the Reserve Bank of Australia (RBA).

Mozo released its Bank of Mum and Dad report, which revealed the share of parents helping their kids get onto the property ladder are not expecting repayment has doubled since we last ran the survey in 2021. And, Mozo also released the Banking Roundup for April.

Inflation data reveals we’ve hit a turning point

The long-awaited quarterly inflation data was released on Wednesday to show inflation is easing, with trimmed mean inflation (the measure the RBA prefers as it removes volatile items) dropping to 2.9% in the March quarter. 

“This puts inflation back within the central bank’s 2–3% target band for the first time since 2021” says Rachel Wastell, Mozo’s personal finance expert.

“It’s good news for borrowers, as it provides some reassurance that there will most likely be a rate cut at the RBA meeting later this month.”

“I doubt it will be the 50 basis points that NAB thinks will occur,” continues Wastell, “but a 25 basis point cut seems to be the most likely outcome for the May meeting.”

While the overall CPI rose 0.9% this quarter, most of that came from housing (+1.7%), education (+5.2%) and food and non-alcoholic drinks (+1.2%). Housing costs, in particular, were pushed up by a 16.3% spike in electricity prices, largely driven by price rises in Queensland where many households no longer have a $1,000 state government rebate.

“This is exactly what we highlighted in Mozo’s latest Energy Report,” says Wastell, “where energy rebates have been masking real power prices.”

“Now that the gloves are coming off those costs will start to hit home, and the RBA will most likely be looking at the impact of these ending rebates when they make their cash rate decisions.”

While this inflation data was collected before the chaos of Trump’s Tariffs wreaked havoc on the markets, and this figure came in a little higher than some expected, it is likely not enough to stop the RBA from handing borrowers a nice post-Easter present.

1 Year Term Deposit rates drop into the 3s

This week confirms that we have officially entered a new era for savers, and it’s not the kind you’ll want to celebrate. On Monday, NAB cut its 1 year term deposit rate to 3.90% p.a., joining Commbank, ANZ and Westpac (in-branch) below the 4% line. The only remaining 4.00%p.a. rate from a Big Four bank is now reserved exclusively for Westpac customers who open or renew a term deposit online.

“Just 17 months ago, all four of the major banks were offering one year term deposit rates starting with a five, but that chapter is over and now we’re looking at rates in the threes,” says Wastell.

“The Big Four banks are quietly cutting rates, and loyal savers are paying the price.”

1 Year Term Deposits (Big Four Banks)

Since the last RBA meeting, NAB, ANZ and Westpac have each trimmed their 1-year term deposit offers by 10 basis points, while CBA shaved 20 basis points from its rate.

Despite the drops from the big players, leading rates are still out there, with G&C Mutual Bank and Unity Bank both offering 4.65% p.a. for their one year term deposits – but for how much longer? That remains to be seen.

NAB vs Leading 1 Year Term Deposit Rate

“If you’re not shopping around, you could be missing out on nearly $200 a year in easy interest,” stresses Wastell.

“With the next RBA meeting not until late May, savers should act now if they spot a rate starting with a ‘4’ because blink – and it could be gone.”

476 term deposit cuts fly through database in April

Big Four term deposit cuts however, are not the full story. According to our latest Banking Roundup for April there have been a wave of changes across term deposits, and 476 individual term deposit rate cuts throughout the month on the Mozo database.

It isn’t just a few players either, as around two thirds of the 76 banks Mozo tracks reduced some or all of their term deposit rates. That includes all of the major banks, and many of their smaller competitors.

The 1 year term also wasn’t the only victim, with shorter terms some of the hardest hit and taking double digit cuts, while longer-term deposits also weren’t spared. The 6 month term deposit is the term with the highest average rate for this term at the moment, sitting at 4.15%p.a., followed by the 1 year at 4.06%p.a. All other terms’ average rates across the Mozo database now start with 3 or less.

“Right now the 6 month term deposit is the sweet spot, offering savers a return of 4.15% p.a. On average, but with hundreds of cuts flying through the database, who knows how long that’ll last,” says Wastell.

“We’ve gone from a plethora of rates starting with a ‘5’ to scrambling for anything above 4, and with another RBA decision around the corner, the window for savers to lock in a competitive return is definitely closing.

Leading Term Deposit Rates

Rates starting with 5 still exist, but there are hoops to jump through

Savings rates that start with a ‘5’ haven’t vanished completely, but they are disappearing – especially for the 20% of savers who don’t know if their savings account has conditions. 

Many of the leading rates on the market come with strict conditions or are limited-time introductory offers that revert to much lower base rates after just a few months. For example, Rabobank and Bankwest both offer headline rates above 5%, but only for the first four months. ING and MOVE Bank offer ongoing bonuses, but savers must make sure they meet monthly deposit and activity requirements. 

On the other hand, Macquarie stands out for its simplicity as while the 5.10% intro rate only lasts four months, it has the second highest base rate on the Mozo database, offering 4.75%p.a. after the intro period ends.

“Macquarie is setting the bar when it comes to transparency in savings rates,” says Wastell.

“In a market full of teaser offers and hidden conditions, they’re proving you don’t need fine print to be competitive, and is one of the key reasons they took out our Best Everyday & Savings Bank in the Mozo Experts Choice Awards for 2025.”

Gift of Mum and Dad Report

For years, the so-called ‘Bank of Mum and Dad’ has been Australia’s silent property giant, helping first time buyers with home loans and financial lifelines. 

But Mozo’s latest Bank of Mum and Dad report shows this lender is evolving, and in fact, this ‘bank’ no longer wants their money back.

What did Mozo find?

• 75% of parents helping their children get on the property ladder in 2025 don’t expect to be repaid. This has doubled since Mozo last conducted this survey in 2021.
• Australian property prices have soared by 51% in five years. The amount buyers need to save for a 20% home loan deposit has increased by $66,160 over the same period.
• Parents are now gifting $74,040 on average to children to help with home loan deposits
• Worryingly, some parents are turning to high-risk credit to help their children get on the property ladder, with 3% borrowing with credit cards or loans.
• While most (67%) parents do not feel emotional pressure to say yes to their children when they ask for money, 1 in 3 admitted they would give their children ‘whatever they want.’
• Mozo experts are urging first home buyers to look beyond the Gift of Mum and Dad and compare home loan rates, as mortgage repayments remain a major expense.

To find out more about the Bank of Mum and Dad and how loans are shifting into legacies as property prices heat up, you can read the report in full here.

Mozo Banking Roundup - What else moved in April?

• Home Loans: Variable rates continued to shift, and Westpac slashed over a percent off its package loan offer. Fixed rates are also dropping quickly, ahead of the RBA meeting.
• Credit Cards: Nab and Westpac are pulling their interest-free card options from the market, with Westpac already removing its buy now pay later style Flex Card from sale, and NAB announcing it would cease offering its similar Straight Up card from 5 May 2025.
• Personal Loans: A quiet month for personal loan changes, with most rate reductions coming through from non-bank lenders looking to stay competitive. 
• Savings Accounts (At-Call Deposits): Although savings rate changes were minimal, all moves in this space that came through were cuts, including a major base rate drop from Westpac and its regional brands. 

Want to read about this in more detail? Download Mozo’s Banking Roundup for April here or if you’d prefer to get Mozo’s monthly banking  insights delivered straight to your inbox, you can subscribe to the Mozo Banking Roundup here.

As a part of Mozo’s commitment to making your money count for more, each month we “roundup” the rate changes, key banking trends and money moves in the Australian personal finance market. 

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