Pensioners’ deposit rates continue to tumble as rates hit an all time low
Pensioners are continuing to draw the short straw when it comes to deposits, according to new Mozo analysis.
Mozo found that on a balance of $53,000, the average pensioner account rate now sits at a mere 0.62%, which is a whopping 163 basis points below the deeming rate of 2.25%.
“Although the government assumes pensioners are getting at least 2.25% annual return on every dollar over $53,000 in savings or investments to determine their pension income, the numbers tell a different story,” said Mozo Director, Kirsty Lamont.
Pensioners who have cash stashed away with the big four banks aren’t winning either, as Mozo’s analysis shows that the average return ranges from 0.21% to 0.35%.
“Times have never been tougher for pensioners when it comes to generating an income from their savings, so following the third official rate cut this year it’s time the government did the right thing by older Australians and reduced the deeming rate,” said Lamont.
AMP and Bendigo Bank were the providers offering the lowest pensioner rate in the Mozo database, while ANZ’s 9-month (0.15%) and 12-month (0.20%) term deposit rate are the lowest rates for those terms for any bank recorded in Mozo’s database.
“There is not a lot of good news around for those in the market for a term deposit, with 86 deposit-takers slashing rates in the past two months and more cuts likely before Christmas as the latest official cash rate continues to wash through the market,” Lamont explained.
BankVic currently has the highest 12-month term deposit rate at 1.05%, while the average 12 month rate sits at 0.64%.
Mozo calculated that a $25,000 investment with the BankVic 12-month term deposit would see you earn $263 in interest, compared to $160 on the average term deposit rate.
Top 5 twelve month term deposit rates
| Provider | Rate | Balance after 1 year |
| BankVic | 1.05% | $25,263 |
| MOVE Bank | 1.00% | $25,250 |
| Judo Bank | 0.97% | $25,242 |
| Teachers Mutual Bank | 0.90% | $25,225 |
| Gateway Bank | 0.90% | $25,225 |
“Notwithstanding the fact that term deposit rates are at an all time low, if you still want the security, there is still something to be gained by comparing rates before locking down your money,” said Lamont.
So if you’d like to look at some of the current term deposit offers on the market, make your next stop our term deposit comparison tool.
*As at 19 November 2020, 12 months at a $25,000 balance
Compare term deposits
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Mozo experts choice awards won:
- Term Deposit - 2024
Term Deposit
5.25% p.a.
6 months$1,000
Yes up to $250,000
Great rates and incentives incl. 0.10% added loyalty bonus at renewal. Option to have interest paid to another bank. Winner of the Mozo Experts Choice Awards 2024^ for Term Deposits.
CompareCompareTerm Deposit
Great rates and incentives incl. 0.10% added loyalty bonus at renewal. Option to have interest paid to another bank. Winner of the Mozo Experts Choice Awards 2024^ for Term Deposits.
- interest rate
- 5.25% p.a.
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $2,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
Read our Mozo Review to learn more about the Judo Bank Term Deposit
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Term Deposit - Online only
5.15% p.a.
6 months$1,000
Yes up to $250,000
Looking for returns that return? Invest as little as $1,000 or as much as $1,000,000. Apply online today in as little as 5 minutes. Protected by the Australian Government’s Financial Claims Scheme up to $250,000.
CompareCompareTerm Deposit - Online only
Looking for returns that return? Invest as little as $1,000 or as much as $1,000,000. Apply online today in as little as 5 minutes. Protected by the Australian Government’s Financial Claims Scheme up to $250,000.
- interest rate
- -
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $1,000,000.00
- Can interest be paid to another bank?
- no
- Automatic rollover
- yes
Read our Mozo Review to learn more about the Bank of Sydney Term Deposit - Online only
-
SMSF Term Deposit
5.25% p.a.
6 months$1,000
Yes up to $250,000
Apply digitally in minutes and manage your SMSF Term Deposit. Flexible cash flow management with three interest payment frequencies that suit you: monthly, yearly, or at maturity. Choose from terms of 3 months up to 5 years. No application or monthly account fees but eligibility criteria and terms and conditions apply. Only accessible to SMSFs with two or up to four individual trustees or one corporate trustee.
CompareCompareSMSF Term Deposit
Apply digitally in minutes and manage your SMSF Term Deposit. Flexible cash flow management with three interest payment frequencies that suit you: monthly, yearly, or at maturity. Choose from terms of 3 months up to 5 years. No application or monthly account fees but eligibility criteria and terms and conditions apply. Only accessible to SMSFs with two or up to four individual trustees or one corporate trustee.
- interest rate
- 5.25% p.a.
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $2,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
-
Mozo experts choice awards won:
- Term Deposit - 2024
Term Deposit
5.25% p.a.
1 year$1,000
Yes up to $250,000
Great rates and incentives incl. 0.10% added loyalty bonus at renewal. Option to have interest paid to another bank. Winner of the Mozo Experts Choice Awards 2024^ for Term Deposits.
CompareCompareTerm Deposit
Great rates and incentives incl. 0.10% added loyalty bonus at renewal. Option to have interest paid to another bank. Winner of the Mozo Experts Choice Awards 2024^ for Term Deposits.
- interest rate
- 5.25% p.a.
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $2,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
Read our Mozo Review to learn more about the Judo Bank Term Deposit
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* Different interest rates apply to different amounts or different interest payment frequencies.
^See information about the Mozo Experts Choice Term Deposit Awards
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