This morning, Westpac has lowered its four and five year term deposit rates.
These reductions position it as the bank offering the lowest rates for these terms. They are also the only main bank now not to offer a 5% rate for five years.
The reduction for a four year term is 20 bps to the new rate of 4.55%, down from 4.75%.
The reduction for the five year term is 30 bps giving a new rate of 4.70%, down from 5.00%. This is equivalent to Westpac's record low 5 year rates offered in the week of February 6, 2009. Low rates at that time lasted only briefly however. (In June 2003, long rates slipped low as well, but not as low as todays reductions.)
These latest reductions follow their November 23 cuts to shorter terms.
Over the past week or so, some of the smaller banks have also been reducing rates, although those reductions focussed on the 1 - 3 year terms.
This table compares the long-end rates of all the main banks:
|for five years ...||Minimum||Rate|
Smaller banks offer similar rates for the five year term, with the top rate offer being from TSB Bank.
|Co-operative Bank||10,000||no offer|
|SBS / HBS||5,000||5.00%|
Investors should be clear about when interest is earned and paid. This can range from 'monthly' through to 'at maturity', and for larger deposits and longer terms this can make a material difference to your actual earnings. Details on the codes used on our tables can he found here ».
The best way to work out the dollar amount of these aspects is to use our comprehensive term deposit calculator, here »