On Wednesday, we will get the December CPI data. The average analyst expectation is for inflation to have been running at 7.1% in the December quarter.
Unless something materially changes, it may come in lower in Q1-2023 as the inflationary trend eases.
Meanwhile, a challenger bank launched a 6% term deposit offer for a one year term. That will make savers more motivated to get their money working harder.
We haven't been this close to the CPI rate for a 1 year TD in a very long time.
In fact, the new SBS Bank 6% offer is the highest from any bank since November 2008.
And it is miles above the equivalent main bank offers for a one year term of about 5.30% from BNZ and Westpac, and 5.20% from ANZ and Kiwibank. ASB offers 5.25% for that term.
But even at 6%, the offer isn't beating inflation, and after taxes, it will be even more in deficit for a 'real' rate. But the speed and quantum of the shift starting 2023 is very notable.
The highest offers for a 3 or 4 month term deposit are from China Construction Bank at 3.90% pa. For terms of between 5 and 7 months, they and ICBC offer 4.95% pa. For nine months the top rate is from SBS Bank at 5.50%, and they now offer this 6.00% pa for a one year term, the market leading rate across all terms and all banks. No rate from any bank for a longer term is higher.
An easy way to work out how much extra you can earn is to use our full function deposit calculator. We have included it at the foot of this article. That will not only give you an after-tax result, you can tweak it for the added benefits of Term PIEs as well. It is better you have that extra interest than the bank, especially if you are in the 39% tax bracket - PIEs are taxes at 28% flat.
The latest headline rate offers are in this table after the recent increases.
| for a $25,000 deposit December 23, 2022 |
Rating | 3/4 mths |
5 / 6 / 7 mths |
8 - 11 mths |
1 yr | 18mth | 2 yrs | 3 yrs |
| Main banks | ||||||||
| ANZ | AA- | 3.10 | 4.55 | 5.00 | 5.20 | 5.20 | 5.25 | 5.25 |
 |
AA- | 3.30 | 4.55 | 5.10 | 5.25 | 5.25 | 5.25 | 5.30 |
 |
AA- | 3.30 | 4.70 | 5.15 | 5.30 | 5.25 | 5.25 | 5.25 |
 |
A | 3.20 | 4.65 | 5.10 | 5.30 | 5.25 | 5.25 | |
 |
AA- | 3.20 | 4.65 | 5.00 | 5.30 | 5.25 | 5.25 | 5.25 |
| Other banks | ||||||||
| China Constr. Bank | A | 3.90 | 4.95 | 5.35 | 5.65 | 5.35 | 5.35 | 5.35 |
| Co-operative Bank | BBB | 3.00 | 4.75 | 5.00 | 5.25 | 5.25 | 5.30 | 5.30 |
| Heartland Bank | BBB | 2.80 | 4.75 | 5.10 | 5.30 | 5.10 | 5.20 | 5.20 |
| HSBC | AA- | 3.15 | 4.45 | 5.00 | 5.15 | 5.15 | 5.10 | 5.10 |
| ICBC | A | 3.65 | 4.95 | 5.35 | 5.65 | 5.25 | 5.25 | 5.25 |
 |
A | 3.30 | 4.60 | 5.00 | 5.50 | 5.25 | 5.30 | 5.30 |
 |
BBB | 3.00 | 4.35 | 5.50 | 6.00 | 5.10 | 5.15 | 5.20 |
 |
A- | 3.45 | 4.45 | 4.70 | 5.20 | 5.20 | 5.25 | 5.25 |
Term deposit rates
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12 Comments
I noticed this new rate earlier today. Hopefully other banks quickly follow.
They won't go so high, at least until the next OCR review, and only if Orr increases by at least 75 bps.
SBS also has quite good break conditions if you need it back, only 1.5% penalty and no 31 days wait. Only ANZ has a better break penalty at present, 1%. SBS is of course B rated, but has done ok in the past.
Problem is the recent past (last 2 decades) has been largely one way for the NZ property market. So the BBB rating takes into account how SBS might look in a downcycle.
Good point. Though I suspect everyone should consider what a down cycle looks like.
People just see the $dollar sign.
Lol - when this is locked down and people cant get their money out... will it have been worth the few dollars extra interest ...
Wow that's faster than I predicted, just cannot keep up at present. Perhaps the major banks will not follow suit until they get confirmation of the next OCR rise in Feb. I guess SBS sees a 75bps or even a 100bps rise already locked in.
Inflation expected to remain 'red hot' - fresh data set to show no easing of tight labour market.....expected to have become more domestically driven (Jenée Tibshraeny)
I can't find this 6% offer anywhere on SBS' website, on Canstar or anywhere else that is reputable - and the link in the table above is to a broken url.
You can find it on sbsbank website. I think it's only just been launched so will take a little moment to update all those comparison sites
Not a PIE
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