SBS Bank makes a play for term deposit funding with a market-leading one year 'special' of 3.70%. It comes as rivals sit tight on relatively low rate offers

SBS Bank is the second bank to raise term deposit rates in 2018.

They have launched a 3.70% 'special' offer for a one year term.

The 'special' is only available until February 19, 2018.

For a one year term it bests every other bank.

It beats Heartland Bank for that term by +10 bps.

SBS Bank also has a market leading offer of 3.30% for four months, and 3.85% for two years.

Higher rates are available from non-bank deposit takers but most have weaker credit ratings than SBS Bank. The exception is UDC (which has the same BBB rating) and who offer 3.80% for one year. UDC is struggling to recover from being put on the block by parent ANZ and then apparently 'sold' to troubled Chinese conglomerate HNA. That sale has fallen over however due to regulatory knock-back so the company remains in ANZ's hands - for now.

The SBS Bank offer is +20 bps better than offered by BNZ and Kiwibank, the majors that offer the highest rate for this term.

Negotiating rates is always a good idea, but the chances of getting banks to shift to a higher non-carded rate is not great these days. Most banks have adequate funding and are facing tame lending growth. But banks that feature higher 'specials' are clearly worth approaching given their advertised signals.

Underlying wholesale rates have not been rising recently. In fact, they have pretty much trended down since the beginning of 2017. And they slipped further today

For higher rates, you need to assess the offers of institutions with a lower credit rating. Rate offers rise significantly from non-bank institutions with sub-investment grade ("junk") credit ratings.

Using 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 financial institutions for terms of less than one year are here, and for terms of 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 5/6/7 mths 8/9 mths 1 yr 18 mths 2 yrs 3 yrs
Main banks                
AA- 3.00 3.30 3.40 3.40 3.50 3.65 3.80
ASB AA- 3.00 3.35 3.50 3.25 3.65 3.80 3.90
AA- 3.00 3.25 3.30 3.50 3.60 3.70 3.90
Kiwibank A 3.00 3.30 3.35 3.50   3.75 3.85
Westpac AA- 3.00 3.30 3.35 3.40 3.50 3.70 3.80
Other banks                
BBB 2.95 3.20 3.50 3.60 3.65 3.80 4.00
Heartland Bank BBB 3.10 3.45 3.60 3.60 3.70 3.80 3.85
HSBC Premier AA- 2.50 2.80 2.80 2.90   2.90 3.00
ICBC A 2.95 3.25 3.55 3.35 3.75 3.85 3.95
RaboDirect A 3.00 3.35 3.35 3.40 3.70 3.85 3.95
RaboDirect BBB 3.30 3.30 3.50 3.70 3.65 3.85 4.00
A- 3.00 3.30 3.45 3.30 3.65 3.85 4.05
Selected fincos                
B*       5.00 5.30 5.70 5.80
F&P Finance BB* 3.45 4.00 4.10 4.15 4.25 4.35 4.50
Liberty Finance BBB- 3.60 3.95 4.25 4.30 4.35 4.40 4.45
UDC BBB 3.00 3.50 3.75 3.80 3.75 3.85 3.85
  * = these credit ratings in this review that are not investment grade.  

Rates in this table are the highest offered by each institution for the terms listed. You however will need to check how often interest is credited or paid. That important factor is not filtered in the above table and rates with various interest payment/credit arrangements are mixed here. However, our full tables do disclose the offer basis.

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

Term deposit rates

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