October snapshot: Could term deposits be a safe bet as interest rates fall?

By Tara McCabe ·
Woman sitting looking at term deposits on her laptop.

As predicted, cuts to term deposit interest rates started to slow down in September. Mozo recorded more cuts to savings rates than to term deposits last month. But with talk of a possible rate cut at the next Reserve Bank monthly meeting, there may yet be more reductions to come. So if you’re looking to lock away some cash before rates plummet any further, now is the time to get switching.

Where Term deposit rates stand

Around 56 providers that Mozo tracks in its database cut term deposit rates last month. The average 12-month term deposit rate fell seven basis points to 0.84% p.a. While this might seem like a rock bottom rate, it is still considerably higher than the average ongoing savings rate, which is currently a shockingly low 0.61% p.a.

All four of the big banks cut term deposit rates. ANZ sliced 45 basis points off its 8-month term deposit to 0.55% p.a. The bank’s new leading offer is its 10-month term deposit, which has an interest rate of 0.85% p.a. All other big banks, including Commonwealth Bank, NAB and Westpac reduced term rates by around five to fifteen basis points.

Judo Bank continues to lead the way

The good news is that there is still time to lock in a rate above 1.00% p.a.

Judo Bank, one of Australia’s newest banks, continues to offer some of the most competitive term deposit interest rates in Australia across a wide range of terms according to the Mozo database. These include:

  • 3-month term deposit - 1.33% p.a.
  • 6-month term deposit - 1.36% p.a.
  • 9-month term deposit - 1.38% p.a.
  • 1-year term deposit - 1.41% p.a.
  • 2-year term deposit - 1.45% p.a.
  • 3-year term deposit - 1.55% p.a.
  • 4-year term deposit - 1.40% p.a.
  • 5-year term deposit - 1.45% p.a.

These rates apply when you choose to have your interest paid to you at the end of the term. With these terms you can deposit as little as $1,000 or as much as $1 million. Deposits up to $250,000 are covered under the Government Deposit Guarantee Scheme. 

Want to learn more about term deposits? Check out Mozo’s term deposit guides for more information. Or if you’re keen to find the one for you, have a look at the terms on offer below.

Compare term deposits - page last updated October 17, 2020

Search promoted term deposits below or do a full Mozo database search. Advertiser disclosure.

  • Online Term Deposit

    1.00% p.a.
    2 years

    $5,000

    Yesup to $250,000

      Compare
    Details
  • Term Deposit

    0.55% p.a.
    3 months

    $10,000

    Yesup to $250,000

      Compare
    Details

*Different interest rates apply to different amounts or different interest payment frequencies.

^See information about the Mozo Experts Choice Term Deposits Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Tara McCabe
Tara McCabe
Money writer

Tara McCabe writes across all areas of personal finance here at Mozo from banking through to insurance. Tara is expert at practical money tips, showing readers ways to live richer and be socially conscious while doing it. She earned a BA (Hons) in English Literature from Canterbury Christ Church University.