Kiwibank, Westpac tweak term deposit rates after 4 day scrap; TSB carries on
2nd Jun 09, 10:22am
Kiwibank and Westpac have tweaked their term deposit rates following their four day tussle for short term deposit customers last week that also saw TSB enter the fray. ASB also raised its one year rate slightly. The competitive activity to win term deposits highlights how difficult banks are finding it to retain and grow term deposits to back new lending in an environment where overseas wholesale funding is still difficult to find and expensive. The average 3 month bank deposit rate rose to 3.77% by Tuesday from 3.43% early last month, which was shortly after the Reserve Bank cut the Official Cash Rate to 2.5%. Kiwibank dropped its 'TD Tuesday' offer of a 100 day term deposit at 4.75% on Friday, and has instead raised its four month rate from 3.75% to 4.50% (for deposits over NZ$10,000). The new four month rate is higher than those offered by the major banks (ASB has a special rate at 4.25%), although SBS is offering 4.60% for a minimum investment of NZ$5,000. Westpac dropped its special 'Chopper' rates, which included a 70 day deposit at 4.80%. Instead, Westpac has opted for a 90 day rate at 4.25% (min NZ$5,000), which is surpassed by SBS offering 4.60%, and Raboplus offering 4.30%. Westpac also dropped its one year 'Chopper Bonus' from 4.55% to a special rate of 4.50% (min NZ$5,000). ASB also made a move in the one year term deposit market, lifting its one year rate of 4.50% (interest at maturity) to 4.55% with interest paid quarterly (min NZ$10,000). TSB said it was still offering its special 100 day rate at 4.75% (interest at maturity, min NZ$10,000), despite initially saying it would drop the rate on Friday. The offer is being reviewed on a day-by-day basis, a TSB spokesman said. See all the latest rates for terms less than one year here, and for terms one year and over here.