Kiwibank raises long term deposit rates above Aussie-owned banks

Kiwibank has raised three, four and five year term deposit rates by 25 to 50 basis points (bps), lifting them beyond rates offered by the Australian-owned banks. Over the last couple of weeks the banks have focussed competitive moves around the four to nine month term deposit market and this latest move may spark a new focus around longer term rates. Term deposit rates are generally on the rise here after the Reserve Bank told the banks they needed more funding from local depositors. Kiwibank generally funds itself locally, while the Australian-owned banks are trying to lower their dependencies on short term foreign funding. For a minimum deposit of NZ$5,000, Kiwibank raised its three year term deposit rate by 25 bps to 5.50%; its four year rate by 50 bps to 6%; and five year by 50 bps to 6.50%. All three new rates are now the highest offered by a bank for their respective terms. Raboplus is offering 5.45% for a three year term deposit and 6% for a four year deposit. Rabo is also offering 6.3% for five years, while HSBC is offering 6.4% for a five year deposit over NZ$100,000. Last week Kiwibank raised its longer term mortgage rates along with the other banks, with its new five year mortgage rate at 8.3%. Click here to see and compare term deposit rates for terms less than one year, and here for terms one year and greater.