July term deposits snapshot: Rates above 2% a thing of the past as banks continue to make cuts
Term deposit rates at or above 2% are officially a thing of the past according to Mozo data*.
At the end of June, Judo Bank was the last bank to drop term deposit interest rates below 2%. It still holds the top spot for two, three, four and five year term deposits as follows:
- Judo Bank 2-year term deposit - 1.75% p.a.
- Judo Bank 3-year term deposit - 1.60% p.a.
- Judo Bank 4-year term deposit - 1.70% p.a.
- Judo Bank 5-year term deposit - 1.95% p.a.
All big four term deposit rates now below 1%
Following a slew of rate cuts, none of the big four banks now have a term deposit rate above 1% p.a.
All four major banks cut interest rates across all of their terms in June. Westpac and ANZ now offer the lowest term deposit rates of just 0.15% p.a. for a 1-month term deposit.
Commonwealth Bank made the biggest cuts out of the four in June, reducing its term deposit rates by as much as 25 basis points. It’s highest term deposit rate now sits at 0.95% p.a. for an 8-month term.
Term deposits expert predictions for July
According to Mozo’s interest rates expert Peter Marshall, it is highly likely that banks will continue to reduce rates in the coming month.
“While there may be less cuts than in June, given that there’s not much competition at the moment, I do expect providers to continue to trim term deposit rates in July,” said Marshall.
The question is, with rates constantly being chiselled away at, are term deposits still worth it?
Marshall said that although term deposit rates are down at the moment, they are still worth looking into.
Both savings rates and term deposit rates are on a downward spiral. The advantage of putting your money in a term deposit, however, as opposed to a savings account, is that your term deposit rate will be fixed for whatever length of time you choose to stash your cash for. With a savings account, on the other hand, interest rates are variable, meaning they could continue to go down on a regular basis.
“With a term deposit you know exactly what return you’re going to get for the period of time your funds will be locked away for. So, even if it is a low rate, you can be sure that in one or two years time, your money is going to have increased,” said Marshall.
Curious to see what term deposit rates are on offer right now? Check out the term deposit rates on offer below or head to Mozo’s high interest savings account page for more options.
*There are currently no term deposits with interest rates above 2% p.a. available in the Mozo database, as of 1 July 2020.
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