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Westpac hikes longer term deposit rates; 18 mth to 5.3%
November 17th, 2009Westpac has hiked its term deposit rates for terms from 18 months to five years by between 25 and 80 basis points. Westpac’s new ’special’ 18 month rate of 5.3% is the highest offered for that term by a bank in New Zealand, while its new five year rate at 6.75% sits 10 bps below the 6.85% offered by ASB and BNZ.
Westpac raised its 18 month deposit rate for deposits over NZ$10,000 by 80 bps to 5.3%. For deposits with terms of two to five years, Westpac raised its rates by 25 bps. See all deposit rates for terms less than one year here, and for terms one year and greater here.
Longer term deposit rates are rising as banks fight hard for local deposits. New prudential liquidity guidelines from the Reserve Bank are forcing banks to raise more funds locally and for longer terms.
The new guidelines follow on from the credit freeze during the latter part of 2008, when banks found it increasingly difficult to access short term ‘hot money’ from global wholesale money markets. This volatile offshore funding generally accounted for around 30% of the overall NZ banking system’s funding.
Tags: ASB, BNZ, Interest Rates, Reserve Bank of New Zealand, Term Deposits, Westpac
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November 17th, 2009 at 9:54 am
jeepers my 450k on 6.79 for another 4.5 yrs seems very good now, shame about all the rest still locked in 8.9 until about when AB is going to take off the brakes… well that’s monkeys for you…
anyway, i hear less savers moaning nowadays about the rates, anyone else noticed that?
November 17th, 2009 at 10:57 am
I was starting to feel bad about locking in 5 years at 6.6…..
Wonder if it will be better to instead of paying off the mortgage faster, just give them our spare cash in a year or so at a deposit rate of 7.6%+ ?
Maybe they could pay me to break my mortgage, that would have to be worth a couple of pennies as they could then lend that money out at a higher rate.
November 17th, 2009 at 11:24 am
hey Paul, let’s make up our own break fee calculation like the banks do with some exponential factor like theirs – that would make me laugh lending the bank their own money and charging interest…
November 17th, 2009 at 11:25 am
but that is of course no different to them charging high mortgages and bundling them with savings accounts with lower (till now) interest
November 17th, 2009 at 12:36 pm
PoP: When do you figure the brakes are coming off? 12 to 18 months?
November 17th, 2009 at 2:49 pm
$450k of debt on property at any rate sounds like a millstone to me.
November 17th, 2009 at 3:33 pm
for those not living in Auckland, 450K mortgage is nothing! Try Sydney, a close friend bought his first home, approx 18km away from central sydney, his mortgage is 600K for a normal 3 bed room home.
November 17th, 2009 at 3:42 pm
many are wearing the millstone … and its getting bigger. Is it any wonder why the creators of the financial crisis ie the banks, are still making huge profits and paying out record bonuses? When will we come to our senses and realise how much we are being screwed.
November 17th, 2009 at 4:22 pm
Hey Jimmy, millstones are so hot right now- All the cool kids have them, like I so wouldn’t be caught dead without my Louis Vutton ltd edition millstone!! The bigger the better.
BTW They go great with my Prada Cilice
November 17th, 2009 at 9:40 pm
Don’t get to smug with your big debts. Back about 1990 in my mid 20’s we were paying 22% some were paying more. Alot of people took a long cold bath back then and still don’t talk much about it.
November 17th, 2009 at 10:19 pm
I’m not sure which is worse – being a monkey trying to pick bottoms, being a sheep off to the slaughter, or being a lemming blindly unaware I’m running toward the edge of a big cliff.
It’s a sobering thought to consider I am one of the above.
I guess it’s better than thinking I’m an eagle flying with the eagles when I’m actually a pigeon.
November 17th, 2009 at 10:29 pm
i wouldn,t be telling too many people i.m paying $636.00 a week in interest !
November 17th, 2009 at 11:35 pm
ruru – from june 2010 it just got to happen
WJD – not being smug, just saying how it is, i know how much interest i’ve paid over the years and that is nothing to be smug about, and i remember growing up hearing of not just those high interest rates but tax at 66 cents in the dollar or thereabouts for some
pwilkie – it’s less than half the size of the other ones, hence some huge break fees that stopped me from breaking them earlier as it was unaffordable without hindsight – jeepers i might even have been able to pay the banks back some principle too, but too late, locked in for the ride (for now)…
November 26th, 2009 at 6:02 am
Sounds like a bank in need of cash deposits to cover losses in other tiers. Or is it just Westpac wanting to spread the joy? It will be interesting to look at fees, credit card rates and penalty charges to see if it is the tail of a trojan horse. A pale one at that.