SBS Bank has upped the ante in the scrap for local funds by introducing new market leading rates for shorter term deposits with a minimum deposit of NZ$5,000. The bank war for deposits in New Zealand has been intensifying in recent months as the bigger banks fight for more local funding. This follows a Reserve Bank drive to wean the big Australian-owned banks off their dependency on short term 'hot money' sourced from global wholesale money markets.

For a minimum deposit of NZ$5,000, SBS raised its 5-6 month 'Term Investment Specials' (interest paid quarterly) by 35 basis points (bps) to 4.75%. The new five month rate at this level is now the highest offered by a New Zealand bank, while the new six month rate is equal to a TSB offer which requires a minimum deposit of NZ$10,000.

SBS also raised its 9-12 month special (interest at maturity) by 15 bps to 5.15%. This is now the highest nine month rate offered by a bank in New Zealand.

At the same time, SBS cut its three month special by 75 bps to 4%. This is still the highest three month rate offered by a New Zealand bank for the NZ$5,000 tier.

See and compare all deposit rates offered in New Zealand for terms less than one year here, and for terms one year and greater here.