Banks and other deposit takers made their call on a Reserve Bank cut well before the central bank got around to last week’s 25 basis point cut, with a large number of them cutting their term deposit rates.
The rate cutting is expected to continue now that the RBA has moved on monetary policy. Savers will have to be more vigilant about shopping around for good deals, such as they are.
Despite saying it wanted to help savers, last week ANZ cut more term deposit raes than it increased. Also last week, Westpac cut TD rates by up to 50 bps, while it increased one by 25 bps.
RateCity’s research director Sally Tindall says: “It is especially frustrating to see ANZ and Westpac hold back part of a home loan rate cut with one hand and slash some of their deposit rates with the other. It pays to shop; around.”
Comparison site Mozo reports in its latest Banking Roundup that rates on 59 term deposit products were cut last month, with an average reduction of 22 basis points. The average rate for a 12-month TD fell from 2.44 per cent to 2.31 per cent.
Three of the four majors cut TD rates: ANZ cut between 10 and 30 bps across the board; Commonwealth Bank cuts rates on terms of 12 months or longer, ranging from 20 to 40 bps; and NAB cut across the range, with reductions of as much as 55 bps.
Some of the other deposit takers that cut rates include Bank of Queensland, Citibank, Macquarie Bank, ME, MyState and Rabobank.
According to Infochoice, the top rate for term up to 12 months is now 2.7 per cent. Arab Bank, Citibank, BCU and Qudos Bank are among those offering high rates.
Savers can get 3 per cent for terms of two years or more but not many savers are prepared to lock their savings away for longer than 12 months.
In the at-call market, Finder.com.au says the top at-call rate is 3.1 per cent, which HSBC is offering as a four-month introductory rate on its Serious Saver account.
Rabobank is offering 3.05 per cent for four months on its High Interest Savings Account and Bank of Queensland is offering 3 per cent as a bonus rate on its Fast Track Saver Account.
Citibank, UBank, ME Bank, ING and Australian Unity all have at-call savings rates between 2.8 and 2.9 per cent.