Long term deposit rates are cut by Westpac, reducing them to their lowest level in more than a decade

Westpac lowers long term TD rates

This morning, Westpac has lowered its four and five year term deposit rates.

These reductions position it as the bank offering the lowest rates for these terms. They are also the only main bank now not to offer a 5% rate for five years.

The reduction for a four year term is 20 bps to the new rate of 4.55%, down from 4.75%.

The reduction for the five year term is 30 bps giving a new rate of 4.70%, down from 5.00%. This is equivalent to Westpac's record low 5 year rates offered in the week of February 6, 2009. Low rates at that time lasted only briefly however. (In June 2003, long rates slipped low as well, but not as low as todays reductions.)

These latest reductions follow their November 23 cuts to shorter terms.

Over the past week or so, some of the smaller banks have also been reducing rates, although those reductions focussed on the 1 - 3 year terms.

All current term deposit offers are listed on our two rate table pages: those for terms of less than one year are here, and those for terms of one year and longer are here.

This table compares the long-end rates of all the main banks:


for five years ... Minimum Rate
  deposit $ p.a.
ANZ 10,000 5.00%
ASB 10,000 5.00%
BNZ 5,000 5.00%
Kiwibank 10,000 5.00%
Westpac 10,000 4.70%

Smaller banks offer similar rates for the five year term, with the top rate offer being from TSB Bank.

Co-operative Bank 10,000 no offer
HSBC 100,000 no offer
RaboDirect 1,000 5.05%
SBS / HBS 5,000 5.00%
TSB 10,000 5.25%

Investors should be clear about when interest is earned and paid. This can range from 'monthly' through to 'at maturity', and for larger deposits and longer terms this can make a material difference to your actual earnings. Details on the codes used on our tables can he found here ».

The best way to work out the dollar amount of these aspects is to use our comprehensive term deposit calculator, here »

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Are Westpac trying to lose all their financially flexible clients? I am already ready to take my floating $2m loan to another of the big four as a result of when Westpac raised their floating rates. Now they are lowering TD rates??? go figure - obviously more interested in scraping the barrel at both ends than concentrating on customer retention.
If they lose depositers and borrowers where is the cents in that....
President of Property

The RBNZ's confirmation of a firm unchanged stance with a hint of a property related bias to hike will inevitably flatten the depo curve.

Deposits...doh....cash is best used to boost your store of durable consumer stuff most likely to jump in cost either on price or by being repackaged !.....
Put cash into a garden...into some chooks....or a 'Predator' fishing kit...or a rifle and ammo...
Putting it in a bank is just boosting fat banker bonuses.