One month on from the Reserve Bank’s emergency cash rate cut in mid-March and something a little unexpected is happening in the world of savings. Amongst all the interest rate decreases, it would seem that one-year term deposit rates are actually increasing.
In the time between the emergency cash rate cut on 19 March and today, the average interest rate for a one-year term deposit has risen from 1.32% p.a. to 1.44% p.a.^ That’s an increase of 0.12% in just one month!
Which banks and credit unions have increased term deposit rates?
A grand total of 47 banks and credit unions listed in the Mozo database, have upped term deposit rates since the RBA’s cut in March^. Rate rises range from as little as 0.05% p.a. to as much as 0.70% p.a. To narrow things down a little for you, here’s a rundown of some of the more competitive one-year term deposit rates, that have increased in the past month:
|Bank/Credit Union||Interest rate||Conditions?|
|Rabobank Term Deposit||2.00% p.a. (0.30% increase)||Available for balances between $1,000 and $2 million.|
|Firstmac Term Deposit||1.95% p.a. (0.05% increase)||Available for balances between $5,000 and $5 million.|
|AMP Term Deposit||1.85% p.a. (0.05% increase)||Available for balances between $25,000 and $5 million.|
|MyState Bank Online Term Deposit||1.85% p.a. (0.15% increase)||Account must be opened online, interest rate available for balances between $5,000 and $5 million.|
|Bank Australia Term Deposit||1.80% p.a. (0.25% increase)||Available for balances between $500 and $1 million.|
|ME Bank Term Deposit||1.80% p.a. (0.10% increase)||Available for balances between $5,000 and $2 million.|
Mozo’s banking expert Peter Marshall said, “It’s great to see quite a few providers increase some rates for depositors, but they are often only for specific investment terms, so it still pays to shop around and compare what’s on offer.”
Term deposit need to knows
As with any banking product, it’s always best practice to read the fine print and know exactly what you’re getting into before you sign on the dotted line. Some need-to-knows when it comes to putting your money in a term deposit include:
- Early withdrawal penalties - a fixed term means a fixed term, so if you want to take your money out before the term is up you will, more often than not, incur a penalty. This could be a reduced interest rate, a penalty fee or both.
- Rollover deals - make it clear to your bank what you want to do with your money once your term reaches maturity, otherwise it may automatically be rolled over into a lower interest rate term.
- 31 day notice period - some banks and credit unions require a 31 day notice period for early withdrawals, so just be sure you’re aware that you may not be able to access your money in an emergency.
Check out Mozo’s guide on term deposit tricks and traps for more information on what to look out for when locking your money away.
Didn’t find the term deposit you were after? Why not head to our compare term deposits hub for more options or take a look at the term deposit interest rates on offer below.
Compare term deposit interest rates - last updated November 28, 2020
- AMP Bank
Term DepositAMP Bank
- MyState Bank
Online Term DepositMyState Bank
Online Term DepositDetails
^Averages taken from information available in the Mozo database, correct as of Wednesday 15th April 2020.
^See information about the Mozo Experts Choice Term Deposits Awards
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