Not to be outdone (by ASB), Kiwibank has raised term deposit rates again too (along with home loan rate increases).
Their new 6 month rate is up +15 bps to 6.05%. That is not only the highest six month rate for any main bank, it also matched Rabobank's rate for the same term to be market-leading.
Kiwibank's 9 month rate has risen +20 bps to 6.10% which matches ASB and just 5 bps below Rabobank's 6.15%.
Their new one year rate is now 6.15%, up +10 bps, but well below Rabobank's market-leading 6.30%.
It has not escaped attention that Kiwibank economists were recently seeing the top of the interest rate cycle. Not at Kiwibank apparently.
Meanwhile, Kiwibank's one year carded fixed home loan rate has been raised by +10 bps, and their two year rate up by +6 bps.
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.
The recent fattening off of wholesale rate rises might be over with the background international pressure for higher wholesale rates again. The UST 10 year benchmark rate rose to a new high since 2007 and isn't far away from reaching a 20 year high now. New Zealand isn't immune to these global pressures. Not only are the geopolitical pressures rising (war won't help), the American debt and budget situation isn't getting addresses while they have a dysfunctional Congress. And in the meantime American economic indicators are all unexpectedly buoyant. None of these global influences suggest interest rates are about to recede.
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.
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.
The latest headline rate offers are in this table after the recent increases.
| for a $25,000 deposit October 18, 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 | 5.85 | 5.85 | 6.00 | 6.00 | 5.70 | 5.25 |
 |
AA- | 4.20 | 6.00 | 6.10 | 6.10 | 6.00 | 6.00 | 6.10 |
 |
AA- | 4.30 | 6.00 | 6.00 | 6.10 | 6.00 | 6.00 | 5.45 |
 |
A | 4.40 | 6.05 +0.15 |
6.10 +0.20 |
6.15 +0.10 |
5.80 +0.10 |
5.50 +0.30 |
|
 |
AA- | 4.30 | 5.80 | 6.00 | 5.90 | 5.80 | 6.00 | 5.50 |
| Other banks | ||||||||
| Bank of China | A | 5.00 | 5.90 | 6.00 | 6.10 | 6.10 | 6.00 | 5.60 |
| China Constr. Bank | A | 5.00 | 5.90 | 6.00 | 6.10 | 6.00 | 5.80 | 5.50 |
| Co-operative Bank | BBB | 4.20 | 5.95 | 5.90 | 6.10 | 6.00 | 5.90 | 5.80 |
| Heartland Bank | BBB | 5.50 | 5.90 | 6.00 | 6.10 | 5.90 | 5.90 | 5.85 |
| ICBC | A | 5.00 | 6.00 | 6.05 | 6.15 | 6.05 | 6.00 | 5.55 |
| Kookmin Bank | A | 4.40 | 5.60 | 5.70 | 6.00 | 5.20 | 5.20 | |
 |
A | 5.05 | 6.05 | 6.15 | 6.30 | 6.10 | 6.10 | 5.90 |
 |
BBB | 4.20 | 5.85 | 5.70 | 6.00 | 5.90 | 5.90 | 5.90 |
 |
A- | 4.25 | 5.75 | 5.80 | 6.00 | 6.00 | 5.90 | 5.80 |
Term deposit rates
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12 Comments
Competition for domestic savings is alive and well. Global cost of funds rising. Life is good for savers.
"The recent fattening off of wholesale rate rises might be over with the background international pressure for higher wholesale rates again"
Some here are prematurely celebrating.
HFL
You very conveniently chose to "forget" to mention the Deposit Takers Act, which was finally passed into legislation on 6 July 2023 guaranteeing up to a total of $100,000 per depositor, per institution. It will be operative by end of next year at the latest. This will make depositors money covered by this Act as safe as Government Bonds, simple as that.
In any case, it is a much safer proposition than speculating in one of most ridiculously overpriced housing Ponzis on this planet.
That 3yr rate at ASB is the interesting one. Every other bank is saying that interest rates will be well down towards 'normal' within 2-3 years, only ASB is saying that things will take longer than that.
Always interested to hear when the crystal ball club jumps into the 5 year fixed rates, on TDs or on home loans - these are the people who sound like geniuses when a few years later they casually mention they 'only have until next year before they come of their 2.79% home loan"
Westpac is the worse bank for Term deposits. Staff do not understand their own products.
online term deposit application does not include options for compounding interest only at maturity. I think they fixed this now
by default online applications are not setup as PIE either. I am asking for recalcuation of interest due this and they declined. I think a call to banking ombudsman is required here
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