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Kiwibank raises long term deposit rates above Aussie-owned banks
Kiwibank has raised three, four and five year term deposit rates by 25 to 50 basis points (bps), lifting them beyond rates offered by the Australian-owned banks. Over the last couple of weeks the banks have focussed competitive moves around the four to nine month term deposit market and this latest move may spark a new focus around longer term rates.
Term deposit rates are generally on the rise here after the Reserve Bank told the banks they needed more funding from local depositors. Kiwibank generally funds itself locally, while the Australian-owned banks are trying to lower their dependencies on short term foreign funding.
For a minimum deposit of NZ$5,000, Kiwibank raised its three year term deposit rate by 25 bps to 5.50%; its four year rate by 50 bps to 6%; and five year by 50 bps to 6.50%. All three new rates are now the highest offered by a bank for their respective terms.
Raboplus is offering 5.45% for a three year term deposit and 6% for a four year deposit. Rabo is also offering 6.3% for five years, while HSBC is offering 6.4% for a five year deposit over NZ$100,000.
Last week Kiwibank raised its longer term mortgage rates along with the other banks, with its new five year mortgage rate at 8.3%.
Click here to see and compare term deposit rates for terms less than one year, and here for terms one year and greater.
OOops, the RBNZ has lost
OOops, the RBNZ has lost control of the credit machine. Not much chance of the local banks attracting deposits from Kiwi savers, yes there are a few still alive, when the same can shift into aussie accounts and collect more. So it stands to reason the ocr is a dead instrument, unlike John's fiddle on which he is screeching out a tune of sorts.
The RBA is now calling the shots and since the big four aussie buggers are not shy on screwing the peasants, expect them to move rates up in anticipation of the RBA hikes. The banks here MUST follow suit or lose deposits. 2 to 3% expected in the short term we are told. In the long run the massive debts in Noddyland will cause the rates to reach well into the teens and stay there for an extended period of time. Property price destruction is assured. Bank balance sheet red ink is certain. Downgrades then follow. Foreign funds then cost more. Down she goes.
Wally, I wonder if this
Wally, I wonder if this interest rate rise is one way of stopping the next housing boom happening? Rural Report. I was in PGG Wrightson this morning and the manager said things on the farms are very bad. Also went into the vet club and a vet I know said things are so tight that farmers are only calling the vets as a last resort. Talked to a painter also and he has 3 days work left and nothing coming up. 22 years in the trade! I think NZ is going to be in for some tough times over the next few years.