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ANZ resets many rates lower, leading term deposits down, follows on mortgages, but still leaves credit card rates unchanged

ANZ resets many rates lower, leading term deposits down, follows on mortgages, but still leaves credit card rates unchanged

ANZ today announced rate reductions to both term deposits, savings accounts, and one standard mortgage rate.

The term deposit rate reductions push the ANZ offer to be the lowest of any bank.

Given its size in the New Zealand market, it would not surprise if other banks now move down as well to build their margins.

The mortgage rate reduction is to their standard one-year rate, adopting a 5.39% price point which is marginally higher than their rivals.

The new savings rate offers are market lows.

These lower rates do not include any movement to credit card rates which have not moved in four years. The refusal of banks to lower these rates as wholesale funds rates have fallen is attracting the attention of Australian regulators.

The lower term deposit rates range from -10 bps to -25 bps and apply for all terms 30 days to 5 years.

At the same time ANZ has cut its term PIE rates as well. They offer two terms, 6 months and one year, and both have been reduced by -10 bps.

Similarly, ANZ has cut its Serious Saver rate by -10 bps to 4%, with the new Premium interest rate being cut to 3.90% which can be added to its 'standard interest rate of 0.10% if at least $20 is deposited monthly and no withdrawals are made.

Larger reductions apply to other savings accounts.

The ANZ Online Account is reduced by -25 bps to 2.75%. Their Call PIE is also reduced by -25 bps to 2.75%.

ANZ's Ready Saver has also been reduced by -25 bps to 1.25% pa.

The lack of action by all banks on credit card rates is starting to get quite marked. In Australia, a Senate hearing quizzed both the Australian Treasury head, and an RBA deputy governor on why the banking industry refuses to move on these rates and neither could offer a satisfactory explanation. Both agreed that regulatory pressure or action may be needed.

A Treasury official said the department conducted an internal review of the record credit card spread "some months ago" and found the gap to be widening.

He said "the fact that it does seem that people who pay these credit card interest rates, those who don't fully pay off their amounts, tend to be people perhaps less capable of servicing that debt – and that worries me."

There appears to be no regulatory pressure in New Zealand to tackle high credit card interest rates. According to RBNZ data, at the end of April, the "end of month simple average standard card interest rate" was 20.1%, the highest it has been since December 2008. The "weighted average interest rate" is 17.6%, a rate virtually unchanged since April 2011. Current benchmark interest rates for the OCR, 90 day bank bills, and the one-year swap rate are all at similar rates of 3.30% to 3.50%.

Use our deposit calculator to figure exactly how much benefit each option is worth; you can assess the value of more or less frequent interest payment terms, and the PIE products, comparing two situations side by side.

All term deposit rates for all institutions for terms less than one year are here, and for terms one-to-five years are here.

Term PIE rates are here.

This positions the latest headline rate offers as follows:

for a $20,000 deposit 6 mths 1 yr 18 mths 2 yrs 3 yrs 5 yrs
             
3.90% 4.10% 4.15% 4.20% 4.30% 4.50%
ASB 4.00% 4.20% 4.30% 4.40% 4.50% 4.65%
4.10% 4.30% 4.35% 4.40% 4.50% 4.65%
Kiwibank 4.00% 4.25%   4.40% 4.55% 4.75%
Westpac 3.85% 4.10% 4.20% 4.30% 4.40% 4.60%
             
Co-op Bank 4.10% 4.30% 4.40% 4.55% 4.60%  
Heartland Bank 4.30% 4.50% 4.55% 4.65% 4.70% 4.80%
HSBC Premier 3.95% 3.95% 4.00% 4.10% 4.25% 4.45%
RaboDirect 4.10% 4.35% 4.40% 4.55% 4.65% 4.85%
SBS Bank 4.50% 4.40% 4.50% 4.60% 4.70%  
4.00% 4.20% 4.30% 4.40% 4.50% 4.70%

Term deposit rates

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2 Comments

4% interest in ANZ's Serious Saver is quite disappointing.

So despite all the new credits, mortgages, etc. savers don't get some piece of the cake?
And it's not for sure that RBNZ will cut interests..

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Yet if you lived in Japan or China and offered 4% they would take your hand off. So maybe it is a case of un-realistic expectations (which it is).

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