The pace of term deposit rate cuts is picking up.
And they are spreading lower than the benchmarks set by ANZ.
ASB and Westpac have pointedly set their offers below the levels ANZ set just five days ago.
Rabobank has chimed in with reductions across the board today.
And they follow a series of other institutions, all cutting.
Only Kiwibank, Heartland Bank, and SBS Bank are left with rates that feature 3% levels in the popular terms.
Lower bank funding costs as reflected by these reductions are allowing lower home loan rates.
Banks are raising their wholesale funding at very low rates which also puts pressure on retail offers to savers.
And after today's market rout, wholesale swap rates have fallen sharply when they opened here today, down -3 bps across the board.
And given inflation is running at 1.7%, after-tax, after-inflation yields from term deposits are likely to approach zero at some point if this trend continues.
For readers looking for risk-free returns, we should also note that the 1.50% offer for the Government's Kiwi Bonds (for fixed 6 month, one year, two year and four year terms) is still available. But Treasury is almost certain to cut this offer to 1.00% very soon. Just a guess on our part, but in the past this rate has been very responsive to the OCR changes.
The updated rates in the table below are the highest offered by each institution for the terms listed. You will, however, need to check how often interest is credited or paid. That important factor is not filtered in the table and rates with various interest payment/credit arrangements are mixed here. However, our full tables do disclose the offer basis. (The codes are explained here).
Our unique term deposit calculator can help quantify what each offer will net you.
All carded, or advertised, term deposit rates for all financial institutions for terms of less than one year are here, and for terms of one-to-five years are here.
The latest headline rate offers are in this table.
| for a $25,000 deposit | Rating | 3/4 mths | 5 / 6 / 7 mths |
8 - 11 mths |
1 yr | 18mths | 2 yrs | 3 yrs |
| Main banks | ||||||||
| ANZ | AA- | 2.50 | 2.90 | 3.00 | 2.85 | 2.85 | 2.90 | 3.00 |
 |
AA- | 2.35
 |
2.85
|
2.80
|
2.75
|
2.70
|
2.70
|
2.70
|
 |
AA- | 2.45
|
2.95
|
2.90
|
2.80
|
2.80
|
2.80
|
2.95
|
| Kiwibank | A | 2.65 | 3.05 | 3.05 | 3.00 | 3.00 | 3.05 | |
 |
AA- | 2.50
|
2.80
|
2.80
|
2.75 | 2.75 | 2.75 | 2.75 |
| Other banks | ||||||||
| Co-operative Bank | BBB | 2.55
|
2.90
|
2.85
|
2.90
|
2.85
|
2.90
|
3.00 |
 |
BBB | 2.60 | 2.80 | 3.00 | 3.05 | 3.10 | 3.15 | 3.20 |
| HSBC Premier | AA- | 2.40 | 2.70 | 2.70 | 2.70 | 2.70 | 2.70 | |
| ICBC | A | 2.55
|
2.90
|
2.90
|
2.90
|
2.90
|
2.95
|
3.00
|
 |
A | 2.25
|
2.95
|
2.95
|
2.95
|
2.90
|
3.00
|
3.00
|
 |
BBB | 2.75 | 3.10 | 3.05 | 3.00 | 3.00 | 3.00 | 3.00 |
 |
A- | 2.50
|
2.90
|
2.90
|
2.85
|
2.85
|
2.95
|
3.00 |
Term deposit rates
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23 Comments
Big call. Let's catch up in a couple of months to see if this prediction comes to fruition. And no funny business - slowing growth or slightly lower share prices doesn't count as GFC 2.0.
And in terms of what RBNZ can counter with when the next recession rolls around - here you go https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulleti…
Inversion of yield curve doesn't mean recession is weeks away.
their economy is going in the opposite direction of ours
Australian Bureau of Statistics data released on Tuesday shows the national trade surplus is now at a record A$8 billion, with exports climbing one per cent from May to June, while imports fell four per cent.
Australian Bureau of Statistics data released on Tuesday shows the national trade surplus is now at a record A$8 billion, with exports climbing one per cent from May to June, while imports fell four per cent.
Hang on. Iron ore prices have been relatively high and 75% of Chinese iron ore has been sourced from Aussie. Are you comfortable with that continuing into the near future?
...nah they are going in the same direction, probably leading the race. Household mortgage stress is through the roof, housing and apartment market is hemorrhaging. They are planning for negative interest rates (as evidenced by their cash ban they are trying to sneak through parliament).
...nah they are going in the same direction, probably leading the race. Household mortgage stress is through the roof, housing and apartment market is hemorrhaging. They are planning for negative interest rates (as evidenced by their cash ban they are trying to sneak through parliament).
Well you're a bundle of joy. Unfortunately, the "evidence" suggests that you're possibly right.
Only time will tell whether the RBNZ has helped or hindered the overall economy. The winners seem to be those already in the property market and the banks which are very profitable and likely to remain that. The losers are anyone trying to save - whether for a first home, or for support in current or future retirement. For the RBNZ to try to force such savers into more risky investments is likely to backfire, as is trying to convince savers to spend now and stop their saving. The reverse is more likely in the near future.
Well seeing as the banks are already complaining about the new higher level of capital they are required to hold, one could only conclude that any amount lost in deposits is going to spell bad news for the banks unless they can find cheaper money elsewhere and the lower the rate the less likely that would be. One would hope we will see TD rates bottom out after one more OCR cut.
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