Where to stash your savings after big banks boost term deposit rates

It’s no secret savings rates have been plummeting non-stop over the past year, but this time round, the big banks seem to have bucked the trend. 

CommBank, Westpac and NAB have all announced increases to their term deposit rates following this month’s RBA emergency cut to 0.25%

NAB’s 10-month deposit is going up by 85 basis points to 1.75% p.a., while CommBank and Westpac are both raising their 12-month deposits by 70 basis points to 1.70% p.a.. For customers aged 65 years or over, Westpac will also increase its 8-month rate by a whopping 115 basis points to 2.00% p.a.. 

Meanwhile, ANZ has made no changes to its term deposits, although it’s the only big bank to pass on part of the latest RBA cut (0.15%) to variable home loan customers. 

RELATED ARTICLE: How have CommBank, NAB, Westpac and ANZ responded to the latest RBA cut?

Big bank term deposit movements

Big bank
TermOld rate (p.a.)
New rate (p.a.)Rate difference (p.a.)Effective date
CommBank12 months1.00%1.70% ($5,000 up to $2 million)+ 0.70%March 19
Westpac12 months

9 months

1.70% (up to $500,000)

2.00% (for 65 years or older)
+ 0.70%

+ 1.15%
March 27
NAB10 months0.90%1.75%+ 0.85%
March 24

Why the big banks still aren’t your best bet

According to Mozo’s Banking Expert, Peter Marshall, these surges in term deposit rates do more to shield the big banks from backlash, than protect Aussie savers from poor interest rates.

“This seems to be part of the big banks’ strategy to stave off criticism that they’ve been cutting at-call deposit rates and won’t be passing on the variable rate cut to mortgage customers,” he said. 

“However they’re only increasing rates for the shorter terms. This may give people some interest income security for a little while, but it won’t be much help in the long run, as it’s likely we are looking at an extended period of low interest rates that could persist for quite a few years.”

“So while it’s something that sounds great right now, it really won't cost the big banks a whole lot in the longer term.” 

Marshall added that the only people set to benefit are those willing to lock money away with the big banks - not savers with at-call deposits or existing term deposit customers.

Where to park your savings instead

If you’re looking for better rates than the big banks, here are the top 12-month term deposits in the Mozo database:

ProviderRate offered (p.a.) (as of 24 March 2020)
Judo Bank
Auswide Bank, Macquarie Bank, Southern Cross Credit Union1.75%

But in the current near zero interest rate environment, is it better to stash your cash inside a term deposit or a savings account

Right now savings accounts offer slightly better rates than term deposits, with the most competitive ongoing savings rate in the Mozo database being 2.00% p.a. - just five basis points above the highest 1-year term deposit rate. However, since at-call savings rates are variable, they could still fall a little in the coming months and close this gap. 

“At the end of the day, your pick between a savings account or a term deposit comes down to personal preference - whether you want to take that little bit of extra interest, or whether you prefer the security of knowing exactly what rate you’re going to get for the duration of your term,” Marshall said. 

Keen to lock some cash away and earn a return on your savings? Then check out these term deposit deals below, or head over to our dedicated term deposits comparison table for even more options.

Compare term deposits - last updated 8 December 2023

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    5.00% p.a.
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