ANZ and TSB Bank launch higher selected term deposit rates, while one of them cuts its savings account rates by -25 bps to very low levels

ANZ has today realigned its term deposit offers to feature a 3.60% rate for nine months.

At the same time it has reduced its one year rate by -15 bps to 3.35%.

Both rates are also available as a term PIE, which will boost after tax earnings if you have a marginal tax rate above 28%.

At the same time, ANZ has cut -25 bps from all its at-call savings accounts. This is a change that will affect a huge number of people.

ANZ's Serious Saver account has had its premium interest rate cut to 2.25%, giving a 2.35% return if you make no withdrawals and at least a $20 deposit in a month.

It's Online Account has had its interest rate cut to just 0.10%.

It's Cash Pie account has also had its rate cut to 0.10%.

And ANZ customers with a Select Account will now get the same 0.10% return for balances of $5,000 and above. Previously those with balances over $100,000 got 0.35%, ,but no more.

Business, and School Plus accounts have also suffered a -0.25% reduction.

Meanwhile, TSB Bank has launched a 'special' 13 month term deposit offer of 3.65%, with interest-at-maturity for investments of $10,000 or more.

TSB Bank also reduced its WebSaver interest rate by -15 bps from 1.90% to 1.75%.

There are now considerable costs for holding funds in at-call savings accounts compared with committing to longer term deposits.

As we have earlier noted, savers may wish to think through the wisdom of locking up of funds for longer terms in what seems to be a turning rate environment. This situation should have savers thinking through the risk/reward scenarios.

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 3.35 3.60 3.35 3.60 3.50 3.50
ASB AA- 3.00 3.20 3.60 3.20 3.50 3.65 3.80
AA- 3.00 3.30 3.60 3.25 3.50 4.00 3.50
Kiwibank A+ 3.00 3.60 3.20 3.35   3.40 3.60
Westpac AA- 3.40 3.35 3.10 3.40* 3.20 3.70 3.30
BBB 2.95 3.50 3.30 3.50 3.55 3.60 3.65
Heartland Bank BBB 3.10 3.30 3.70 3.40 3.40 3.40 3.70
HSBC Premier AA- 2.55 2.90 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 3.80 3.60 3.70 3.80 4.00
A- 3.00 3.15 3.15 3.65* 3.25 3.30 3.40
UDC A- 3.00 3.35 3.60 3.60 3.65 3.45 3.45
          * This rate is for 13 mths, IAM

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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"savers may wish to think through the wisdom of locking up of funds for longer"
If I'm getting 0.1% on my call account, I think I will lock up funds for a bit longer rather than on call

you could put it in ASB fastsaver at 0.25%,think they need to change the name to fastnot saver acct.

It wasn't that long ago when you bonus saver accounts had better rates than term deposits.Looks like that has now changed, and they are wanting people to lock funds in for longer. I moved all my money out of ANZ, over the last year, as their rates weren't competitive, and another bank offered me .25% on top of the advertised rate for their online call account, for shareholders.