RaboDirect has increased their term deposit rates today.
These increases are 10 bps across the board from 6 months to a four year term.
The changes push RaboDirect up to offering the best rates for a two year term and above when interest is paid at maturity, less so when interest is paid monthly.
Their headline rates apply only for interest at maturity.
Lesser equivalent rates apply when interest is paid monthly, quarterly, or 6 monthly. There is no Rabo option to be paid interest annually.
If they stick to their usual pattern, Rabo is likely to raise the term PIE rates tomorrow.
RaboDirect last raised term deposit rates on September 9, 2013. Rabobank has an investment grade credit rating of AA- which is the same as the big four Australian-owned banks.
For investment grade banks, Heartland (BBB-) offers higher rates for terms 18 months and below.
Although wholesale swap rates fell during the second half of September, they have been rising again in the first half of October, resuming a rising trend that started back in May 2013.
Bank competition for TD's is nowhere near as aggressive as for mortgages. However, it is always wise to shop around. Banks do have a need to extend the maturities of their liabilities, and although they do this mainly via their wholesale debt programs, depositors will find them keener to negotiate on terms of two years and longer than on shorter durations.
And using their Term PIE products can also help eek out better yields.
Use our deposit calculator to figure exactly how much benefit each option is worth; you can assess the value of more or less frequent interest payment terms, and the PIE products, comparing two situations side by side.