Fast falling interest rates are seeing major banks reduce term deposit offers. But not all banks are doing this. We reveal 9 banks still offering savers 6% or more

The dramatic recent 25 basis points (bps) falls in home loan rates have brought similar falls in many term deposit rate offers.

But we are in that in between, transition time where there is an unusually wide range of offers between institutions, from those who've moved rates compared to those who haven't. There is a 40 bps range for six month offers, and 70 bps range for one year offers. This gives savers a 'last chance' opportunity.

And the opportunity is to lock in above 6% rates. They probably won't last long.

That's because financial markets are signaling interest rates have quite a way to fall yet. 

Today's wholesale "what's priced in" suggests up to three 25 bps Official Cash Rate cuts are possible before the end of 2024.

If that happens, term deposit rates will follow that down.

With falling wholesale benchmarks and low and falling loan demand, there's no good commercial reason for banks to hold term deposit offer rates high, as much as some savers 'wish' that to happen. Banks are businesses, not charities.

But right now, there are still good offers to be had.

With Heartland Bank cutting rates this week, the highest offers are now from Rabobank. We have no way of knowing, but savers would be wise to assume their high offers are about to be trimmed too.

Here are the banks still offering 6% or more:

• Bank of China; 6.10% for six and nine months, 6.05% for one year.
• China Construction Bank; 6.00% for one year
• Heartland Bank; 6.15% for six months, 6.10% for nine months, 6.00% for one year.
• ICBC; 6.15% for six and nine months, 6.20% for one year.
• Kiwibank; 6.00% for 6 months.
• Rabobank; 6.15% for six months, 6.20% for nine months, 6.30% for one year, 6.10% for 18 months.
• SBS Bank; 6.05% for six and nine months.
• TSB; 6.00% for one year.
• Westpac; 6.00% for eight months.

 The best offer at present for about six months is 6.10% from three banks, all challengers - Heartland, ICBC, and Rabobank.

The best offer for about nine months is Rabobank's 6.20%.

The best rate for about one year is Rabobank's 6.30%. Its 6.10% for 18 months is the only above-6% offer for that term.

Savers should make due diligence enquiry about these rates. When is interest paid out? Is there a PIE option? These details can make a material difference to your after-tax returns.

We should also note that so far no bank has adjusted down their at-call or other savings rates. This is another area due for potential sharp adjustments lower. But there isn't much you can do about these, even for Notice Saver accounts. Steel yourself if you have one of these. We expect announcements will come soon.

In our last home loan rate review, we contrasted the 2022 tracking of a one year fixed home loan average with the one year swap rate. That showed the 'margin' between them higher in 2024, although in 2022 the volume of housing transactions was substantially more giving space for narrower margins.

In contrast, here is the same comparison with the average one year term deposit rate. It's likely this shows it just before a notable drop:

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). But in a falling market with weak loan demand, don't be surprised if you don't get a positive response.

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.

for a $25,000 deposit July 23, 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	5.75	5.75	5.70	5.60	5.35	5.10
	AA-	4.40	5.75 -0.15	5.75 -0.25	5.60 -0.30	5.40 -0.30	5.10 -0.30	5.00 -0.20
	AA-	4.30	5.95	5.90	5.80	5.60	5.40	5.20
	A	5.00	6.00 -0.05	5.90 -0.10	5.80 -0.10		5.45 -0.15	5.10 -0.15
	AA-	4.30	5.80	6.00	5.80	5.70	5.50	5.30
Other banks
Bank of China	A	5.50	6.10 -0.10	6.10 -0.10	6.05 -0.10	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	5.85	5.80	5.80	5.60	5.35	5.15
Heartland Bank	BBB	5.50	6.15 -0.10	6.10 -0.15	6.00 -0.20	5.90 -0.10	5.70 -0.20	5.35 -0.45
ICBC	A	5.40	6.15	6.15	6.20	5.95	5.70	5.40
Kookmin Bank	A	4.40	5.80	5.90	6.00		5.00	4.60
	A	5.05	6.15	6.20	6.30	6.10	5.90	5.60
	BBB	4.20	6.05	6.05	5.95	5.80	5.50	5.30
	A-	4.25	5.80 -0.10	5.80 -0.10	6.00 -0.10	5.60 -0.20	5.40 -0.10	5.20 -0.10