Term deposit rate slash frenzy: 50 lenders cut since February

By Katherine O'Chee · · 5 min read
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If you’re looking to save for a rainy day, then chances are you’ve thought about locking some cash away in a term deposit. 

But committed savers may have found their options increasingly squeezed, as term deposit rates over the past month or so continue to tumble, while a handful of savings rates also dropped after March’s RBA cut. 

New Mozo data reveals that since the start of February, 50 providers have slashed their term deposit rates, with average cuts ranging from 7 basis points to 13 basis points across all terms.^

This makes February the 17th consecutive month where the Mozo database recorded more term deposit rate cuts than increases. 

And according to Mozo’s interest rates expert, Peter Marshall, this is a downward trend we will keep seeing with term deposits. 

“We’re in a very low interest rate environment and I expect that to continue for years. So lenders are not going to be able to charge higher rates for home loans for a long time, which means they can’t offer much to depositors,” he said. 

Term deposit rate movements since February

Here’s a breakdown of the average falls in term deposit rates since February 1^:

Term
1 Feb 2020 (p.a.)Now (p.a.)^Difference (p.a.)
1 month0.89%0.76%- 0.13%
3 months1.46%1.35%- 0.11%
6 months1.48%1.39%- 0.09%
9 months1.38%1.31%- 0.07%
1 year
1.43%1.36%- 0.08%
2 years1.40%1.33%- 0.07%
3 years
1.39%1.31%- 0.08%
4 years1.38%1.29%- 0.09%
5 years1.39%1.29%- 0.10%

Right now, the average 1-year term deposit rate in the Mozo database sits at a paltry 1.36% p.a., although this is still higher than the corresponding rates offered by the big four banks. 

In terms of the big banks, while NAB and Westpac made no movements between February 1 and now, ANZ and Commonwealth Bank didn’t hold back the axe: 

  • CommBank shaved off between 5 to 30 basis points, with its 1-year rate now at 1.00% p.a.
  • NAB and Westpac’s 1-year rate are currently equal first among the big four, at 1.20% p.a.

Judo Bank still leading the way 

While Aussie savers may feel the strain of all-time-low interest rates, they shouldn’t lose all hope, as it’s still possible to secure a great deal. 

For instance, challenger bank Judo Bank has remained the term deposits leader in the Mozo database since its launch last year. If you sign up to its 1-year term, you’ll be looking at an impressive 1.95% p.a., while customers willing to part with their savings for longer can snag even more competitive rates of up to 2.15% p.a. (for its 5-year term).

RELATED ARTICLE: Judo Bank Term Deposit wins big in this year's Mozo Experts Choice Awards

And according to Marshall, unlike savings accounts, term deposits can offer security, as the rate you secure will be locked in for the duration of your term.

“In times of volatility where you never know what’s going to happen with the share market, for people who want to make sure that their capital is protected while also getting some return, a term deposit will always be a viable option,” he said. 

RELATED ARTICLE: Are term deposits worth it in 2020? 

Ready to build your rainy day fund today? Get started with some term deposit deals below, or jump over to our term deposits comparison table to compare even more options.

Compare term deposits

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 101 term deposits.
Last updated 27 July 2024 Important disclosures
  • Mozo Expert Choice Badge
    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.

    Compare
    Go to site
    Details
  • 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.

    Compare
    Go to site
    Details
  • 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.

    Compare
    Go to site
    Details
  • Mozo Expert Choice Badge
    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.

    Compare
    Go to site
    Details
  • Term Deposit

    3.70% p.a.
    6 months

    $5,000

    Yes up to $250,000

    Compare
    Find out more
    Details


^Mozo data as of 12 March 2020

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

^See information about the Mozo Experts Choice Term Deposit 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.

Today's term deposit rates