ASB has cut its one year term deposit to 4.45% this morning from 4.60% pa.
This brings it broadly into line with the other banks who have also cut term deposit rates over the past week.
It was the only change ASB made. Bank Direct made a similar reduction.
The highest bank term deposit rate for a $10,000 deposit or greater is now at the recently-arrived Indian bank, Bank of Baroda, which is offering 4.85% with interest paid quarterly. Bank of Baroda has a BBB- investment grade credit rating.
TSB Bank offers 4.70% pa with semi-annual interest payments.
To get a 5.0% rate at a main bank, you will now need to lock your funds for three years at minimum. Some of those banks do pay interest monthly, however.
The international response by banks and central banks to the continuing global credit crisis is to flood economies with cheap credit. While it is debatable whether this is solving the structural issues, it certainly is penalising savers in a profound way, undermining the wisdom of saving. What is remarkable is that savers are showing little anger at these public policy positions.
You can compare the term deposit rates of all institutions across all terms here >>
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4 Comments
Credit Crunch
"Senior sources have revealed that leading banks, including Barclays and Standard Chartered, have radically reduced the amount of unsecured lending they are prepared to make available to eurozone banks, raising the prospect of a new credit crunch for the European banking system.
Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks."
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