Taranaki-based bank TSB has hiked a number of its longer term deposit rates by between 15 and 50 basis points (bps). Deposit rates rose from the second half of 2009 after new Reserve Bank guidelines led banks to fight harder for local deposits. SBS Bank has also hiked a number of deposit rates. For deposits over NZ$10,000, TSB hiked its 18 month term investment rate by 15 bps to 5.25%; its two year rate by 25 bps to 5.5%; three year by 25 bps to 6%; and four year by 25 bps to 6.5%. One basis point is 0.01%. These hikes follow similar moves by Westpac earlier in the week. See and compare all term deposit rates for terms less than one year here,and terms one year and greater here

For the NZ$5,000 to NZ$10,00 tier, rates for terms 12 months to 5 years were hiked by between 25 and 50 bps. TSB also introduced new 15 month deposit rates, at 4.75% for the NZ$5,000 tier and 5.2% at the NZ$10,000 tier. SBS hiked its 12-24 month term investment specials (interest paid quarterly) by 15 bps to 5.2%. It also raised its 12 month rate with interest at maturity by 10 bps to 5.25%. At the same time, SBS cut is 4-6 month rates (interest quarterly) by 5 bps to 4.7%. New Reserve Bank guidelines aimed at banks with overseas funding have had an upward influence on all bank deposit rates over the second half of 2009 and into 2010. The new prudential liquidity guidelines require the big banks to secure more of their funding from local term deposits and for longer terms, which has increased competition for funds, pushing up rates. This was done in an effort to wean the big Australian owned banks off their reliance on short term "˜hot money' from global wholesale money markets, which generally accounted for around a third of their funding.