Term deposit rates continue to fall - five percent plus now very rare and only for extremely long terms

(Updated with BNZ reductions Tuesday morning.)

Kiwibank has today reduced its term deposit rates for all terms of 2 year and longer. BNZ has made similar cuts.

The reductions range from 10 15 bps to 25 bps.

For a deposit of $10,000 or more for a term of two years, the Kiwibank rate has reduced by 15 bps to 4.35% from 4.50% where interest is taken at maturity. Where interest is taken monthly, the same reduction applies, but the rate is now 4.25% for that term.

For a 3 year term, the reductions are 25 bps, to 4.50% (at maturity) and 4.30% (monthly).

The rates for 4 years are 4.75% / 4.40%, and for five years are 5.00% / 4.50%.

Kiwibank's full rate card, along with the rates for all other banks are set out here » for terms of one year and greater, and here » for terms less than one year.

The BNZ has cut 10 bps from its 150 day special to 4.00% from 4.10%.

BNZ has also cut rates for all its terms from two to five years. The new lower rates are 2 years now 4.30% (cut from 4.50%), 3 years 4.50% (cut from 4.75%), 4 years 4.75% (cut from 5.00%), and 5 years 5.00% (cut from 5.25%).

For the major banks, here is an update of term deposit rates for $10,000.

This summary is indicative only, and readers must check with each institution before making any final decision, especially around the conditions applying to when interest is paid. (This table focusses on the 'best rate' rather than the cash flows.)

Here are the current rates today for selected second tier banks.