Westpac 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.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.