ASB introduced a market leading nine-month deposit rate, but cut most of its longer term rates over the weekend, while Westpac hiked its one year and 18 month rates on Monday morning as banks continue to jostle for local funding from Mum and Dad investors. ASB cut its one, two, four and five year deposit rates by between 10 and 25 basis points (bps), with its five year rate down 25 bps to 6.5%. The rate is now 35 bps below BNZ's market leading rate of 6.85%. ASB also cut its six month rate by 20 bps to 4.6%, but raised its nine month rate by 10 bps to 5.1%. ASB's new nine month rate is the leading bank rate for this term. Meanwhile, Westpac raised its one year deposit rate by 70 bps to 5.2%, and its 18 month rate by 20 bps to 5.3%. Both rates are now the highest offered by a bank for their respective terms. 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.
The banks have been in an intense battle for term deposits following new prudential liquidity guidelines released by the Reserve Bank in June that required the banks to raise more funds locally and for longer terms. This has also put pressure on finance companies which seek to offer premium rates over the less-risky bank deposit rates. ASB had pushed up the term deposit rate boundaries in the first week of November, hiking its five year rate to 6.85%. However, it cut a number of its market leading deposit rates toward the end of November, and the latest move takes its rates back into the pack of rates offered by other banks, with only its nine month rate now on its own ahead of other banks.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.