Banks, finance companies mostly raise deposit rates

A number of banks and large finance companies made changes to deposit rates on Wednesday, with rates generally being pushed up. The Reserve Bank's drive to force banks and others to raise funds locally and for longer terms is helping drive up deposit rates across the board, which in turn is being passed on as higher mortgage rates. Also, expectations the Reserve Bank will hike its OCR early next year because of a faster economic rebound are pushing up wholesale interest rates. See and compare all deposit rates for terms less than one year here, and for terms one year and greater here. BNZ introduced a new 18 month term deposit special of 5.1% for deposits of NZ$10,000 and above, with interest paid quarterly. This is the highest 18 month rate offered by a bank in New Zealand. The new rate matches Kiwibank's 5.1% for a one year term deposit as the highest rates for bank deposits of terms 18 months and less. Raboplus also made a number of changes to its term deposit rates. Despite cutting its three month rate by 25 basis points (bps) to 3.5%, it raised its one to five year deposit rates by 20-35 bps. Rabo's 'fighting rates' now seem to be its three and four year rates at 5.75% and 6.15%, respectively. Marac Finance raised its shorter term deposit rates, but cut longer ones. Marac raised its three month to one year rates by 25-125 bps, including hiking its six month rate by 125 bps to 5.75%, which is surpassed by South Canterbury's new 6% rate for six months. Marac cut its three to five year rates by 50 bps. UDC, which is wholly owned by ANZ, raised one year, 18 month and two year rates by 25, 45 and 25 bps, respectively for deposits over NZ$10,000. It raised its NZ$5,000 tier rates to match the NZ$100,000 tier. Finally, Public Trust cut all of its rates one for terms one year and above at the NZ$5,000 tier level by 50 bps, but increased its NZ$10,000 tier by 10-40 bps.