Reduction in interest rates for term deposits 'unlikely to deter savers'

Friday 19 August 2011

Article by Mozo

Aussies are unlikely to forgo putting cash into term deposits in the coming months, despite the recent cutting of interest rates by a number of financial institutions, it has been claimed.

Aussies 'likely to continue using term deposits in the short term'

Chief executive of AMP Craig Dunn said the tendency towards cautious investment decisions is symptomatic of the uncertainty in the markets.

He asserted that "only time will tell" as to whether or not saving in term deposits starts to slow, but added: "I am not sure we are going to see a great change in the short term."

Among the banks to reduce the interest rates offered to savers putting their funds into term deposits were National Bank of Australia, ANZ and Westpac.

Mr Dunn observed that despite hints that the Reserve Bank of Australia may be hiking interest rates in the future, interest rates are being dropped by many financial institutions.

This comes after Westpac's financial figures revealed that the bank was still enjoying strong growth in its term deposits as Aussies continued to save their cash.

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