Term deposits a better option in light of falling rates at banks?

More Australian consumers could be looking at utilising term deposits, as standard bank accounts have witnessed falling interest.

Despite the Reserve Bank of Australia increasing rates in November 2010, major banks across the country have done the opposite, news.com.au reports.

Last year, the majority were attracting new online customers by luring them in with promises of six per cent interest, but this has now subsided.

This month, none of the major banks were offering rates higher than 5.75 per cent, which could increase the demand for term deposits that typically offer six per cent.

The reason for the apparent dip, Canstar Cannex analyst Adam Beu told the publication, is because banks are finding it easier to borrow money from abroad.

"It seems competition is cooling as funding becomes more readily available," he remarked.

Earlier this month, Farrelly's representative Tim Farrelly told Money Management that people are more likely to see higher returns from term deposits than international equities.

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