'Consistent pricing' benefits term deposit holders
Australian term deposit holders have benefited from more consistent pricing patterns on their funds this year, it has been reported.
An investigation by the Queensland Sunday Mail into an ASIC report from April, which criticised banks for rolling term deposit holders on to a lower rate at the end of the term, found that variations from month-to-month "seem to have flattened out significantly" since then.
The newspaper commented that such a trend has contributed to the huge savings boom that is occurring in Australia at present, as consumers have been encouraged to compare term deposits thanks to the strong rates and fierce competition for funds among banks.
Indeed, it quoted Reserve Bank assistant governor Guy Debelle, who last week said: "In order to boost their share of deposit funding, banks in Australia have competed aggressively in terms of price.
"The average cost of the major banks' new deposits is now only slightly below the cash rate, whereas prior to the onset of the global financial crisis, the deposit rates were about 150 basis points below the cash rate."
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