ASB has announced a 25 basis point lift in all its overnight and cash account rates.
It is the first of the banks to increase its deposit rates in the wake of the Reserve Bank's July 29 increase in the Official (Overnight) Cash Rate (OCR) of 25 basis points to 3%.
All banks have already announced increases in their mortgage rates of 25 to 30 basis points. See our article on those mortgage rate increases here.
See all bank call and cash account rates here.
Banks have been largely increasing their term deposit rates over the last two years (see our interactive term deposit rate charts here) to encourage more term deposit savings so banks can meet their requirements under the Core Funding Ratio rules imposed by the Reserve Bank.
These rules force the banks to raise more than 65% of their funds from long term and local funds rather than 'hot' short term wholesale money markets.
Last week ANZ raised its 6 month term deposit rate from 4.9% to 5.1%. It raised its 5 month rate from 3.5% to 4%.
Westpac, however, cut its 3 month rate to 4.2% from 4.4%. It also cut its 5 month rate from 4.9% to 4.75%.
However, Westpac increased its 6 month rate from 4.25% to 5.1%.
National raised its five month deposit rate to from 3.5% to 5.1%, but it cut its 6 month to 4.5% from 4.9%.
See all term deposit rates up to 9 months here.
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