ANZ, CommBank and Westpac pump up term deposit rates to over 3%
Update 04/11/2016: The term deposit rate increases that were introduced by the big banks in August 2016 are all but gone. For full details read our article "Major banks quietly slash term deposit interest rates".
With the Reserve Bank slashing the official cash rate by 25 basis points to 1.50%, savings account and term deposit rates were expected to take a hit this month. However, the big banks have gone against the grain, by failing to pass on the full rate cut to home loan customers, but pumping up rates attached to term deposit accounts.
For instance, while Westpac only cut its standard variable home loan rate by 0.14%, its term deposits will see rate increases of up to 0.55% bringing its one year term to 3%, two year term to 3.10% and three year term to 3.20% (from 8 August).
ANZ took its rate rise on term deposits even further, with its one-year Advanced Notice Term Deposit increasing by 0.60% to 3.00% and two-year term deposit jumping up by 0.75% to 3.20% from 5 August.
Commonwealth Bank, the biggest bank in Australia also followed this trend, increasing its one year term deposit rate by 0.55% to 3.00% and two and three year terms by 0.50% to 3.10% and 3.20% respectively.
To put this into perspective, Mozo’s savings account calculator shows a saver that stashes $10,000 in the three year term deposit account from CommBank with a 3.20% rate, will have $163 more at the end of the term after the rate increase.
“Today we’ve reduced our mortgage rates to a record low while increasing term deposit rates to provide an opportunity to the millions of Australians who rely on savings,” explained Matt Comyn, Group Executive at CommBank.
“To meet the needs of savers, Commonwealth Bank will increase one, two and three year term deposits with all rates set to rise to 3.0% or greater.”
These rate increases bring the big banks on par with challenger brands like UBank and Gateway Credit Union, who are known to offer some of the most competitive term deposit rates in the market.
“Even with interest rates at historic lows, we are mindful of the impact of any changes on our customers. Today’s decision takes our mortgage rates to new lows and provides our savings customers with some of the most competitive term deposit rates on the market today,” he said.
<<Update>> Smaller provider, BOQ has also hiked up its term deposit rates by up to 0.60%. From 9 August 2016 its one year term deposit rates will jump up to 3.05% and its two and three year rates will climb to 3.15% and 3.25% respectively.
Mozo will be watching this space to see if other providers follow in the big bank’s footsteps and pass on generous rate hikes to term deposit customers. In the meantime, to compare the big banks, with what’s currently on offer in the term deposit space, visit our comparison page and compare deals side by side.