ANZ provide relief for savers but term deposit rates continue to slide
ANZ has bucked the trend of falling term deposit rates by upping its 9-month Advance Notice Term Deposit rate by 50 basis points to 2.70% as a handful of banks and financial providers continue to cut rates.
The rate rise in the short-term rate comes after Mozo’s Banking Roundup revealed that ANZ had hiked interest rates on longer-term deposits throughout July.
Despite ANZ’s positive move, Aussie savers continue to have their term deposit rates slashed with CUA, Goldfields Money, Maitland Building Society and Firstmac all making cuts of up to 45 basis points to a range of term deposit rates yesterday.
The most notable changes came in the 1-year market where both Firstmac and Goldfields Money cut their previously market-leading rate by 14 basis points, leaving UniBank and Teachers Mutual Bank as the only lenders left offering a 2.85% interest rate on a 1 year term.
Despite ANZ’s rate rise, ME Bank continue to be the market leader on 9-month term deposits offering a 2.75% interest rate for its customers.
And this is often the case according to Mozo’s head of Data, Peter Marshall who said big banks aren’t necessarily the most competitive in the term deposits market.
“People should definitely be checking with some of the smaller guys that do have the better rates in the market," he said.
The statistics don’t paint the prettiest of pictures for Aussie savers. Data from Mozo revealed that a whopping 19 lenders cut their interest rates on 12-month term deposits for a $25,000 investment over the past month, resulting in an average rate cut of 0.03% across the market.
While term deposits were previously seen as the most sound investment of savings, Aussies are now facing tougher choices when it comes to deciding where to put their hard-earned cash with savings accounts now offering competitive rates.
For this reason, Marshall believes that conditional, bonus savings rates offer some serious value to customers looking to earn the most interest on their money.
“You’re going to have to lock your money away for two years to find an interest rate that can beat the best ongoing bonus savings account rate, so at-call deposits still offer good value considering you can pull your money out at any time”, said Marshall.
See the table below for a comparison of the top three 12-month term deposits vs. the top three savings accounts with an ongoing bonus interest rate.
|Term Deposits (12 months)||Savings Accounts with an ongoing bonus interest rate|
|2.85% - Teachers Mutual Bank|
2.85% - UniBank
2.80% - ME Bank
|3.00% - RAMS Saver Account (Minimum deposit of $200 and no withdrawals in the month)|
3.00% - AMP Bett3r Save Account (Minimum deposit of $2,000 per month into linked Bett3r Pay Account from an external source)
3.00% - Australian Unity Active Saver (Minimum deposit of $250 and no withdrawals in the month)
*Term deposit rates calculated for a $10,000 investment.