Another main bank, ASB, now offers 6% for term deposits of 1-year, joining Kiwibank. ASB also becomes first bank to raise key 2-year home loan rate above 7%

Spring is starting to bloom for savers. Not so much for borrowers.

ASB is joining Kiwibank as another main bank offering a carded 6% one year term deposit rate.

Already ANZ and Westpac had offered 6% for terms of 18 months and two years. But it is the one year and shorter terms that will attract kiwi savers. These are the durations they have most of their rapidly rising term deposit funds parked in.

ASB's Monday move coincides with the bank raising its two year home loan rate to 7.05%, the only bank now with that key mortgage term that high.

Challenger banks are also moving their term deposit offers higher. Although with two main banks now over 6%, the pressure will be on many of them to restore their advantage over the main banks. But that 6% can be accessed at some of them for terms less than one year.

The highest one year rate in the current market is now Rabobank's 6.15%.

Among challenger banks, many - but not all - offer 6% or higher rates. For terms less than one year you can get these higher rates from Bank of China (6.00% for nine months), Heartland Bank (6.00% for nine months), ICBC (6.00% for nine months), and Rabobank (6.00% for nine months). For terms of one year and longer, 6%-plus rates are available from Bank of Baroda, Bank of China (6.10%), China Construction Bank, Heartland Bank, ICBC, Kookmin Bank, Rabobank (6.15%), SBS Bank (they no longer offer their 6.5% rate however), and TSB.

Savers and borrowers alike should remember you can negotiate with any bank over their carded rate offers. You won't get a better rate if you don't ask. Whether a better rate is offered to you is up to the bank, and their perceptions of you, your financial situation and how important they feel it is to gain or retain your business. Many bank officers have some minor discretion on rates.

One risk savers should watch is the cost of wholesale money and you can do that by looking at swap rates. You can do that here. Wholesale swap rates jumped recently, a week or two ago, but since have eased off.

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 taxed at 28% flat.

* Kookmin Bank's 6.10% one year offer is for deposits of $100,000 and more. For a $10,000 minimum it is 6.00%.

The latest headline rate offers are in this table after the recent increases.

for a $25,000 deposit September 4, 2023	Rating	3/4 mths	5 / 6 / 7 mths	8 - 11 mths	1 yr	18mth	2 yrs	3 yrs
Main banks
ANZ	AA-	4.30	5.80	5.85	5.95	6.00	5.70	5.25
	AA-	4.20	5.85 +0.10	5.85 +0.10	6.00 +0.10	5.75 +0.25	5.90 +0.20	5.80 +0.20
	AA-	4.30	5.80	5.85	5.95	5.80	5.50	5.25
	A	4.20	5.85	5.85	6.00		5.70	5.20
	AA-	4.30	5.80	5.85	5.95	5.80	6.00	5.50
Other banks
Bank of China	A	5.00 +0.30	5.90 +0.02	6.00 -0.08	6.10 -0.08	6.00 +0.30	6.00 +0.50	5.60 +0.30
China Constr. Bank	A	5.00	5.85	5.90	6.00	5.85	5.50	5.40
Co-operative Bank	BBB	4.20	5.80	5.85	5.95	5.80	5.70	5.50
Heartland Bank	BBB	4.00	5.90	6.00	6.10	5.35	5.30	5.30
ICBC	A	4.80	5.90	6.00	6.05	5.85	5.55	5.40
Kookmin Bank	A	4.40	5.60	5.70	6.00*		5.20	5.20
	A	4.75	5.90	6.00	6.15	6.00	5.70	5.60
	BBB	4.20	5.75	5.70	6.00	5.35	5.35	5.35
	A-	4.25	5.30	5.40	6.00	5.75	5.70	5.50