Some green shoots of competition start to show in short term deposit rates, with one 9 month rate as high as others offer for five years

Some green shoots of competition start to show in short term deposit rates, with one 9 month rate as high as others offer for five years

There have been a number of term deposit rate changes today.

ASB, which ended its "seven month special" of 3.60% on Friday, is back with a new higher standard nine month rate of 3.60% today, a rise of +50 bps for that term.

BNZ has also raised a term deposit rate by +50 bps. It has raised its 5 month rate (150-159 days) to 3.50%. 

At the same time , BNZ has added +5 bps to its 9 month rate (270-364 days) to 3.60%.

These changes keep both ASB and BNZ with offers that match ANZ's eight month rate of 3.60%.

Not to be outdone, SBS Bank has raised its 9 month rate to 3.80%, which is the highest rate of any bank for any term. At this level it matches both Heartland and RaboDirect for their five year term.

All banks, but especially the second-tier banks, need local deposit funding if their loan demand is growing. 

But banks are limited by the RBNZ's "core funding" rules as to how and where they find those additional funds.

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 carded, or advertised, 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.

The latest headline rate offers are in this table.

for a $25,000 deposit Rating 5/6 mths 8/9 mths 1 yr 18 mths 2 yrs 3 yrs
AA- 3.15 3.60 3.25 3.45 3.35 3.40
ASB AA- 3.20 3.60 3.20 3.65 3.25 3.35
AA- 3.50 3.60 3.25 3.30 3.35 3.40
Kiwibank A+ 3.50 3.20 3.25   3.25 3.40
Westpac AA- 3.50 3.10 3.20 3.20 3.25 3.30
BBB 3.60 3.30 3.20 3.60 3.30 3.35
Heartland Bank BBB 3.30 3.30 3.40 3.40 3.65 3.70
HSBC Premier AA- 2.80 2.90 2.90   2.90 2.95
RaboDirect A 3.50 3.35 3.40 3.40 3.45 3.55
RaboDirect BBB 3.55 3.80 3.25 3.60 3.35 3.40
A- 3.15 3.15 3.20 3.25 3.30 3.40
UDC AA- 3.25 3.50 3.55 3.65 3.35 3.35

Our unique term deposit calculator can help quantify what each offer will net you.

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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