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BNZ follows mortgage rate hike with a range of equivalent term deposit rate rises, setting itself slightly above its main rivals

BNZ follows mortgage rate hike with a range of equivalent term deposit rate rises, setting itself slightly above its main rivals

BNZ has increased some term deposit rates this morning, following RaboDirect yesterday.

These changes come as BNZ also raised its variable mortgage rates, one up by 0.25%, others up by only 15 bps. See separate story here.

The term deposit rate increases involved most terms up to 18 months. Only their nine month rate is unchanged.

For all terms up to 6 months, the increases are a full +0.25%.

For a one year term, the new rate is 4.25%, a rise of 15 bps from 4.10%.

For an 18 month term the new rate is 4.50%, up 20 bps from 4.30%.

These changes position BNZ with higher rates for these terms than ANZ, ASB or Westpac, but not as high as Kiwibank. Some smaller banks offer better rates too (see table below).

At the same time, BNZ also announced equivalent increases to their PIE funds.

And their 30 day term saver interest rate went up too, to match the standard term deposit rate for that period.

These changes follow RaboDirect's term deposit increases yesterday which positioned them with 'best rates' for six and twelve month terms.

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.

All term deposit rates for all institutions for terms less than one year are here, and for terms one-to-five years are here.

Term PIE rates are here.

This positions the BNZ offers as follows:

for a $20,000 deposit 6 mths 1 yr 18 mths 2 yrs 3 yrs 5 yrs
             
3.75% 4.10% 4.75% 5.00% 5.25% 5.75%
ASB 3.75% 4.10% 4.30% 4.60% 5.00% 5.50%
BNZ 4.00% 4.25% 4.50% 4.75% 5.00% 5.50%
Kiwibank 4.10% 4.35%   4.75% 5.00% 5.75%
Westpac 3.75% 4.00% 4.30% 4.75% 5.00% 5.50%
             
Co-op Bank 4.10% 4.25% 4.80% 5.05% 5.30%  
Heartland Bank 4.00% 4.25% 4.50% 4.75% 5.00% 5.50%
HSBC Premier 3.65% 3.80% 4.00% 4.10% 4.30% 4.60%
RaboDirect 4.25% 4.35% 4.75% 5.00% 5.25% 5.65%
4.00% 4.40% 4.40% 4.85% 5.10%  
TSB Bank 3.80% 4.10% 4.50% 4.75% 5.00% 5.75%

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5 Comments

There's a real divergance between competitors in the term deposit market. Some real scope for negotiating a good rate

For one year and under, why would anyone take out a term-deposit, rather than get same or better rates in an on-call account?

Some of the special rates (Kiwibank in particular) are better than a call account, and don't require making deposits every month to get the bonus rate.

I take your point about not having to remember to depost a dollar every month to get the bonus rate. 
But kiwibanks term deposit rates are lower than on-call accounts.  Their best rate under one year is 4.35% for $10,000 for 12 months, paid at maturity.
Co-op have 4.35%, you don't need 10,000, you are on call, and interest is paid monthly, so the annual-effective-rate is higher than kiwibanks 4.35% due to compounding interest (4.35 compounding monthly works out equivalent to 4.438 paid at maturity)
Rabobank also have 4.3% which is 4.386 annualised, also higher than kiwibanks.
 

It's so much easier in Europe where banks have to advertise the annual-equivalent rate for comparison purposes, no need to whip out the calculator to compare advertised rates.
 
With rates heading upwards, i really don't understand why people would lock in a lower than floating rate, rather than take a higher rate now and watch as it floats even higher.
 
Without an explicit govt guarantee i guess there is the banks credit rating to take into account, but we all know the government would bail out savers if an NZ bank went bust, just as they always have in the past.

Exactly! its a waiting game. Who will blink first. Eventually they will put up the longer terms but only after collecting as much as possible at the lower rates.
Wish I could see the wiggly line!