Banks trim term deposit rate offers in slow and steady track, shortening the terms for where their peak rates are pitched. But there are exceptions and options

January is ending with term deposit rates slipping lower.

Both Kiwibank and TSB have opened this week with lower offers to term deposit savers. And they follow trimmings by SBS late last week.

All this is happening despite wholesale rates being little-changed.

But what may be changing and inducing these cuts is loan demand has started 2025 weak. Banks have no need to offer 'more' or even hold the line, when loan demand is weak. Savers pay.

Also falling has been the risk-free benchmark; the Kiwi Bond rates fell last week too.

We are now down to only two main banks offering a 5% term deposit (TD) rate, BNZ and Kiwibank. The next 'high rate' offer from a main bank is 4.85%. Update: BNZ has now withdrawn its 5% rate.

There are still some 5% plus rates available from challenger banks, however. Savers should note the new 5.35% six month offer from SBS Bank, a recent rise.

And if you are up for the added risk, we should note that SBS Bank has a capital bond issue open at present that offers 6.25%.

But that capital bond won't qualify for the guarantee under the Depositor Compensation Scheme when it kicks in mid-year.

When you invest, always check how interest is compounded. Depending on how much you are committing, compounding more often is materially better. But some banks advertise their "interest at maturity" rates different to their compounding rates, which for some can be set a little lower. Both Kiwibank and Rabobank do this, although most other main banks don't.

Use the calculator at the foot of this article to see the differences.

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 this environment don't get your hopes up for a positive response. Carded rates are likely to now be the 'best rate', except in quite special circumstances.

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 changes over the past week. The background colour-code indicates 5%+ rates still available.

Update: The following table has been updated with Wednesday's BNZ's TD rate cuts. Also note that Heartland Bank cut rates on Thursday, January 30, and those changes are not reflected in this table. See our full tables for the latest rates.

for a $25,000 deposit January 29, 2025	Rating	3/4 mths	5 / 6 / 7 mths	8 - 11 mths	1 yr	18mth	2 yrs	3 yrs
Main banks
ANZ	AA-	4.25	4.80	4.70	4.75	4.55	4.45	4.35
	AA-	4.25	4.85	4.70	4.55	4.30	4.20	4.30
	AA-	4.20	4.80	4.75	4.55	4.50	4.35	4.40
	A	4.25	5.00	4.75	4.60		4.50	4.40
	AA-	4.25	4.85	4.70	4.75	4.60	4.40	4.40
Kiwi Bonds. 'risk-free'	AA+		4.50		4.25		3.75
	Rating	3/4 mths	5 / 6 / 7 mths	8 - 11 mths	1 yr	18mth	2 yrs	3 yrs
Other banks
Bank of China	A	4.40	5.00	4.85	4.80	4.65	4.45	4.45
China Constr. Bank	A	4.30	4.95	4.85	4.85	4.65	4.50	4.40
Co-operative Bank	BBB+	4.15	4.90	4.70	4.80	4.60	4.50	4.40
Heartland Bank	BBB	4.65	5.05	5.00	4.75	4.65	4.50	4.40
ICBC	A	4.65	5.35	5.05	4.95	4.75	4.55	4.40
	A	4.35	4.90	4.70	4.80	4.65	4.40	4.40
	BBB	4.25	5.35	4.85	4.80	4.50	4.50	4.50
	BBB+	4.15	4.80	4.70	4.55	4.55	4.40	4.40
Non-Bank Deposit Takers	Rating	3/4 mths	5 / 6 / 7 mths	8 - 11 mths	1 yr	18mth	2 yrs	3 yrs
Community institutions
First Credit Union	BB	4.25	5.25	5.00	4.90	4.60	4.50
Heretaunga Bldg Society		4.30	5.10		4.80		4.50
Nelson Building Society	BB+	4.00	4.50	4.40	4.55		4.15	4.15
Police Credit Union	BB+	4.20	5.00	4.80	4.75	4.50	4.30
UnityMoney	BB	4.25	5.00	4.80	4.55	4.45	4.25	4.25
Wairarapa Bldg Society	BB+	4.05	4.50	4.90	4.75	4.50	4.30
Finance companies
Christian Savings	BB+	4.25	5.00	4.90	4.85	4.65	4.45	4.45
Finance Direct			3.95		6.50	5.90	6.00	6.10
General Finance	BB	4.55	6.05	6.15	6.25	6.00	5.75	5.50
Gold Band Finance	BB-		3.75	3.75	6.40	6.20	5.75	5.75
Liberty Financial	BBB	4.25	5.85	5.65	5.50	5.00	5.00	4.90
Mutual Credit Finance	B+				6.50	6.50	6.75	6.25
Xceda Finance	B+		6.50	6.40	6.40	6.00	5.80	5.50