Hot on the heels of Kiwibank reverted its 6.10% one year term deposit (TD) special offer to 5.90%, BNZ has launched its own time-limited 'special' term deposit offer.
BNZ's is 6.15% for any term from 180-209 days, essentially six months.
But the offer will only last for 29 days until July 17.
At the same time, BNZ has tweaked two longer term rates, for 18 months and three years, down by five basis points.
The shifts by Kiwibank and BNZ have altered the sweet spot slightly for the main bank TD options. But there is actually little change in the wider bank market.
Wider still, the emergence of AMP offering term deposits creates another option.
Across all terms, the highest main bank term deposit offer has now become BNZ offer, 6.15% for six months.
And BNZ also has the highest nine month (6.10%) and 12 month (6.00%) offers from any main bank.
For all banks, the Rabobank 6.30% trumps all others. That's for a one year term.
Even wider, AMP is now offering term deposits, white-labeling the Heartland Bank options plus a premium. That makes its one year term deposit offer 6.30% as well, with Heartland Bank offering 6.20% for that term. For a shorter term AMP's offer is 6.35% for both six and nine months.
Topping all for institutions with an investment grade credit rating is Liberty Financial. 6.60% for six months, 6.85% for nine months, and 7.10% for one year. (Liberty's credit rating is the same as for Heartland Bank, SBS Bank, and Co-operative Bank).
(Higher rates again are available from others, but these have sub-investment grade credit ratings).
We should also point out that after-tax returns can be enhanced for some savers with higher tax rates, by the choice of PIE structures. Not all banks offer these, but most of the main banks do. For a nine month bank offer, they can be boosted by about ~30 basis points going this way. In some cases that will make up any difference, or more.
Always ask a bank for a better rate. Many bank staff have discretion to offer more than the advertised rate. (And check your bank's app offers as they too are often enhanced to retain you).
Use the term deposit calculator here, or the one below the table, to calculator your expected net returns.
The latest headline term deposit rate offers are in this table after the recent increases. (Updated with Co-operative bank change).
| for a $25,000 deposit June 19, 2024 |
Rating | 3/4 mths |
5 / 6 / 7 mths |
8 - 11 mths |
1 yr | 18mth | 2 yrs | 3 yrs |
| Main banks | ||||||||
| ANZ | AA- | 4.30 | 5.90 | 6.00 | 5.90 | 5.90 | 5.65 | 5.30 |
 |
AA- | 4.40 | 5.90 | 6.00 | 5.90 | 5.70 | 5.40 | 5.20 |
 |
AA- | 4.30 | 6.15 +0.10 |
6.10 | 6.00 | 5.85 -0.05 |
5.60 | 5.25 -0.05 |
 |
A | 4.50 | 6.05 | 6.00 | 5.90 -0.20 |
5.60 | 5.25 | |
 |
AA- | 4.30 | 5.90 | 6.05 | 5.90 | 5.80 | 5.50 | 5.30 |
| Other banks | ||||||||
| Bank of China | A | 5.50 | 6.20 | 6.20 | 6.15 | 5.95 | 5.70 | 5.35 |
| China Constr. Bank | A | 5.50 | 5.80 | 5.90 | 6.00 | 5.85 | 5.65 | 5.40 |
| Co-operative Bank | BBB | 4.30 | 6.05 | 6.00 -0.15 |
6.00 +0.10 |
5.80 | 5.70 | 5.35 |
| Heartland Bank | BBB | 5.50 | 6.25 | 6.25 | 6.20 | 6.00 | 5.90 | 5.80 |
| ICBC | A | 5.40 | 6.15 | 6.15 | 6.20 | 5.95 | 5.70 | 5.40 |
| Kookmin Bank | A | 4.40 | 5.60 | 5.70 | 6.00 | 5.00 | 4.60 | |
 |
A | 5.05 | 6.15 | 6.20 | 6.30 | 6.10 | 6.10 | 5.90 |
 |
BBB | 4.20 | 6.10 | 6.15 | 6.05 | 5.95 | 5.60 | 5.30 |
 |
A- | 4.25 | 5.90 | 5.90 | 5.90 | 5.80 | 5.50 | 5.30 |
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19 Comments
Swap rates heading in a downward trajectory.
OCR will remain flat or may reduce sometime in the next 12 months.
But Term Deposits are increasing?
Are banks becoming hindered due to lack of liquidity? Or are they scratching around for any small amount of profit margin become mortgage lending has dropped off?
What's the background here?
TD longer terms have been steadily shaved back while the shorter terms have had slight upward tweaks from time by all the major banks. That illustrates a basic strategy of encouraging investments which will see TDs mature for reinvestment at rates lower than the present longer terms. Bit of a bob each way for both sides of the coin then isn’t it. Wouldn’t be surprised though to see another shaving come off the long term rates in advance of the August OCR announcement.
Swap rates are a major indicator of what are the current collective beliefs of the money markets, and as such they should be taken seriously.
Yes, they are essentially a hedging mechanism (they normally relate to the interest rates associated with the exchange of a fixed interest rate for a floating rate, or vice versa, often in order to hedge against unexpected variations in interest rates), and they can well be wrong, even significantly so, and they certainly do not guarantee anything, as you said.
But I do not see much better forward indicators easily available, in particular I would not trust individual opinions over and above what are the current signals of the market (signals which, after all, still represent a snapshot of the average rates outlook of major market participants).
DC did an analysis of mortgage rates history about a week ago. Not a prediction at all, but rather he just looked at what was the best result for each approach. Always pick the best rate, or the longest term etc etc.
Seemed more sensible than predicting.
I do have predictions, but believe in none of them.
US 10 year bond yield has broken out from a 40 year downward trend. The current recency bias in thinking is that future interest rates will be lower than current rates - why? Because that is what we’ve just experienced for decades. Assuming the future will be the same could be incorrect.
My view is that it’s just as likely that the OCR could be 8+ % in 5-10 years time, as it is that could be less than 5%. Major demographic changes taking place - and a lot of debt in the system that is very risky - which in theory should demand a higher rate of return to hold (ie higher interest rates)
Agree.
The ocr never went below 4.5% until 2009. The last 10 years was possibly a failed experiment .. where growth was created by debt and immigration.
The problem is that it's become unsustainable and the smart younger generation are leaving and we can't cut credit costs so are importing a ton of unskilled peeps to keep the ponzi moving.
It's not far from breaking point.
Maybe the banks are looking to review and differentiate products by risk once the TD guarantee kicks in 12 months or so hence. e.g. Pie accounts as a “unit trust” investment might or might not be covered. I guess the depositor will ultimately pay for the insurance.
Here is a summary. We'll know what products are and are not covered when we see the DCS logo on the product.
For now :
"What's covered
current accounts (sometimes called transactional or call accounts)
savings accounts
term deposits.
These deposits must be held with a bank, building society, credit union or finance company registered or licensed in New Zealand.
What's not covered
bonds and other tradeable products
managed investment schemes (including KiwiSaver and other retirement schemes)."
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