Long-term savers may soon get some much-needed relief, with term deposit rates trending upward, and an innovative new product from Bank First recently hitting the market.
Mozo data shows that April was the second month in a row where term deposit interest rates trended upwards, in stark comparison to rates for savings accounts, which continued their long-time trend of plummeting returns.
According to Mozo Data Manager Peter Marshall, the uptick in banks increasing term deposit rates may reflect global funding conditions.
“With the cost of overseas funding rising, banks are likely looking to bolster their local funding instead. One way of doing that is to bump up term deposit rates, to entice customers to lock their savings away with the bank for an extended period,” he explained.
The bad news is that despite 19 providers mainly increasing term deposit rates compared to just 5 mainly slashing rates, the top offers in the market haven’t improved since last month.
“We’re seeing a trend toward interest rate rises in term deposits, but there haven’t been any big, market-changing moves just yet. I think we might be waiting a while still for that,” Marshall said.
One market-changer, however, came in the form of a completely new term deposit offer from customer-owned Bank First.
The recently introduced Bank First Interest First Term Deposit is available for a five month term, with 2.30% interest on offer for savers locking away $500 to $49,999, or 2.45% for up to $1 million. In what is potentially a market first, this interest is paid into a customers Bank First transaction account on the first day of the investment term.
“This product is good news for savers who are looking for an immediate return on their rainy day fund, and the rate on offer, while not the highest around, is relatively competitive. For some savers, the upfront interest may be worth the slightly lower rate,” said Marshall.
You can find out more about the Bank First First Term Deposit here, check out some of the top term deposit offers in the table below, or head over to our term deposit comparison table to find the best value offer for you.