Heartland Bank changes three term deposit rates, grabbing best-bank status for three and nine month terms, but giving up that status for a two year term

Heartland Bank changes three term deposit rates, grabbing best-bank status for three and nine month terms, but giving up that status for a two year term

Heartland Bank has today (Friday) changed term deposit rates to emphasise its competitiveness for shorter terms.

Today it increased its 3 month rate by +35 bps to 3.60%. That is not quite the highest bank rate in the 3 to 4 month range; Kiwibank pips it with 3.65% for 4 months.

It increased its 9 month rate by +40 bps to 3.70%. That is the top rate for this term from any bank.

And it cut its two year rate by -25 bps to 3.40% from 3.65%. This means they no longer offer the highest two year rate; that mantle now falls to RaboDirect.

Heartland still offers its 3, 4 and 5 year rates at 3.70%, 3.75% and 3.80% respectively, and each at the top end of the market for these terms.

Over the past week BNZ, Kiwibank and SBS Bank have also changed term deposit rates, some down, some up.

Banks are fine tuning their term deposit rate offers to follow what motivates savers in this category, and the trend has been to be more competitive in the shorter terms. This essentially follows what savers want, rather than what banks want. Banks would rather encourage longer term saving and a number of them pitched competitive rates in terms greater than one year just after the previous OCR change. But they found this did not motivate savers in sufficient numbers to be significant for them, hence the shift to a shorter focus.

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 3/4 mths 5/6 mths 8/9 mths 1 yr 18 mths 2 yrs 3 yrs
                 
AA- 3.00 3.15 3.60 3.25 3.45 3.35 3.40
ASB AA- 3.00 3.20 3.60 3.20 3.65 3.25 3.35
AA- 3.00 3.50 3.60 3.25 3.30 3.35 3.40
Kiwibank A+ 3.65 3.15 3.20 3.25   3.25 3.40
Westpac AA- 2.70 3.50 3.10 3.20 3.20 3.25 3.30
                 
BBB 2.95 3.60 3.30 3.25 3.60 3.30 3.35
Heartland Bank BBB 3.60 3.30 3.70 3.40 3.40 3.40 3.70
HSBC Premier AA- 2.55 2.80 2.90 2.90   2.90 2.95
RaboDirect A 2.85 3.50 3.35 3.40 3.40 3.45 3.55
RaboDirect BBB 2.75 3.55 3.30 3.70 3.60 3.35 3.40
A- 3.00 3.15 3.15 3.20 3.25 3.30 3.40
UDC AA- 3.00 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.

Update: This story has been corrected to note Kiwibank has a 3.65% four month rate.

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1 Comments

Not quite sure who they think they are fooling with these very very low rates. Rates this low p.a. mean but mere chump change after tax even with sizable deposits.

Not worth locking in under current global economic conditions. You just up the risk of losing via the OBR.