ASB cut a number of its deposit rates over the weekend that were at the top end of the market as it raised its one year rates. The moves come as competition for local deposits has been increasing in recent months, with new Reserve Bank prudential liquidity guidelines putting upward pressure on bank term deposit rates. ASB's moves were for deposits over NZ$10,000. ASB raised its one year deposit rates by 15 basis points (bps) to 5.15%, lifting it ahead of offers by other banks, although it is equal to a special offer by SBS Bank (min. NZ$5,000). See all deposit rates for terms less than one year here, and for terms one year and greater here. New guidelines proposed by the Reserve Bank in June require the banks to raise more funds locally and for longer terms in an effort to reduce their dependency on short term 'hot money' sourced from global wholesale money markets. This has put pressure on banks' interest rate margins and forced them to raise deposit rates as they fight harder for local funds. The competition has been such that state-owned Kiwibank, which has until this year sourced all of its funds locally, was forced to raise money offshore back in October. ASB cut its six month deposit rate from a (bank) market-leading 5% to 4.8%, which is still above most offers by other banks. SBS is currently offering a special 5% rate for six months. ASB also cut its two year rate from 5.4% to 5.3%, although this is still above offers from the other big banks. HSBC is also currently offering 5.3% for two years, but this is for deposits over NZ$100,000. ASB cut its three year rate by 35 bps to 5.75%, a rate matched by a number of other banks. Again, HSBC has the highest bank rate for this term at 5.9% for deposits over NZ$10,000. Finally, ASB cut its five year rate by 10 bps to 6.75%. This leaves BNZ leading the market for this term with 6.85% for a five year deposit.