Two banks announce special term deposit offers, both for terms less than one year, and both with rates that compare well with an 18 month term

Two banks announce special term deposit offers, both for terms less than one year, and both with rates that compare well with an 18 month term

Competition for term deposits has just hotted up.

Two banks have just announced attractive special rates rates for seven and eight month terms respectively.

ANZ has added +25 bps to their eight month rate offer, taking it to 3.55%.

And SBS Bank has gone one better (or actually +10 bps better), announcing a 3.65% seven month rate.

These are rate levels that compare favourably with main bank offers at 18 months.

And both punctuate a general trend of stable of soft term deposit offer rates. In fact, as our interative chart below shows, rates have been stable for quite some time. And because markets don't really expect significant rises in the overall levels any time soon, these types of offers are in fact unique opportunities.

However, they are 'specials' and the offer periods probably won't be around too long.

In ANZ's case, you could choose their term PIE option, which would boost your effective after tax return. If you are on the 30% tax rate, their offer as a term PIE is equivalent to a standard rate offering of 3.69%. If you are in the 33% tax bracket, the comparative is the equivalent of 3.85% pa. This works because the term PIE will only charge you a final tax at the rate of 28%. (If you are on a tax rate of 28% or less, there is no advantage. to using a term PIE.)

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 3.25 3.55 3.50 3.55 3.65 3.80
ASB AA- 3.00 3.25 3.45 3.50 3.60 3.70 3.80
AA- 2.90 3.25 3.25 3.50 3.60 3.65 3.75
Kiwibank A 3.00 3.30 3.40 3.40   3.70 3.85
Westpac AA- 3.00 3.30 3.50 3.40 3.65 3.65 3.80
Other banks                
BBB 2.95 3.25 3.35 3.35 3.60 3.75 3.85
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 2.80 3.30 3.30 3.35 3.65 3.80 3.90
RaboDirect BBB 3.00 3.65 3.40 3.45 3.65 3.85 4.00
A- 3.00 3.15 3.20 3.25 3.50 3.65 4.05
Selected fincos                
B*       4.80 5.00 5.30 5.50
Liberty Finance BBB- 3.60 3.95 4.25 4.30 4.35 4.40 4.45
UDC BBB 2.95 3.45 3.65 3.70 3.65 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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Comment Filter

Highlight new comments in the last hr(s).

Why are the bank's on call accounts interest rates so incredibly tiny?

Good question, unfortunately the answer is probably as simple as, because they can.

Bad populist answer though Foxglove that contributes nothing - Simple answer is call rates are very low because the regulators quite rightly down weight call deposits in the banks core funding ratios - but term deposits are very high e.g. 6-9 month term deposits 1.5% above bank bill and 1.75% above OCR, 2.4% above annual CPI

cui bono

Hahaha just as I was arguing on the recent article stating mortgage rates could fall further. . This will now put pressure on banks to raise rates gradually

Major banks are making more money from NZ customers than Australian. Interest rate margins are also larger here;

Cost to income ratio looks wonderful too..... until the music stops.

That is feeble analysis. Have a look at this. Look at the last table in this set. Then ask, why is Kiwibank just so weak? And whay are there two Aussie-owned banks building their results, whereas the other two are having trouble earning what they did two/three years ago ? Even the largest Aussie-owned bank has been treading water, profit-wise. That is quite different to the shallow barbeque analysis.

Self-serving criticism should be seen as that. Readers need to be equally critical of unreasonable bank results as they are of those making criticism that is clearly conficted.

What is the point of the 'more from Kiwis than the largest Aussie bank' critique? That's just silly clickbait. There are only eleven retail banks here operating here, five significant. In Australia there are about 30, fifteen significant. We tried to establish a locally owned bank with government support. It is an earnings fizzer. And it undermines the growth of non-Govt supported local banks. We tell polsters we like NZ-owned banks but we give all our business to the big four. Why is that? Should we be forced to support the weak? Some people want us to do that, which could be a fast way to make the whole system weaker.

If you really want NZ owned banks to grow and match theri Aussie-owned ones, you need to support them (real support, without compulsion).

Thanks David, point well made.

Hearsay only, but I understand that 40% of overseas revenue from dairying goes straight back out as profit to overseas banks.
If so, bring on the 'compulsion".

You might want to live in a socialist dictatorship like Venezuela but I’d prefer to make my own choices based on a meritocracy and competition.
The domicile of the banks with respect to dairy is irrelevant. There are plenty of $10m dairy farms (“assumed” market value) sitting on $6-8m in debt. So, naturally the interest payments are staggering. I would say that this is a problem with dairy investment assumptions more than bank profits. Having said that, the banks need to share in the pain as they made the stupid lending decisions, along with farmers with irrational exuberance...

Any idea, when the music will stop. Can you please share with me as I want to pick up some fire sales -houses. House stocks going up but bloody no one is selling. My last 3 low offers got rejected. When will these vendors break. RP (maybe combined with HO), can you write a piece for the Herald about the prices crashing and the vendors need to read this. Just keep it property focused as I still want to keep my job. Don't want you commenting on economy or anything else money wise - you will send us into a recession. Keep up the negative work on house prices, you are seriously helping me. Cheers

You sound confused, far from someone who should risk investing. Take care my friend

Not confused at all. I've taken big risks in property in the past, like I said before only way in my view to get ahead in our tiny great nation. Salary and savings would not have got me anywhere. :-)

Chessmaster - you are indeed very confused and desperate. Before trolling further, I suggest you read this article first;

Its obvious by your comment you need some assistance in forming an investment strategy :)

Most so called "experts have been making predictions for the last 10 years. 1
What they are forgetting is every economy is cyclical
Point is say it too often and you are bound to get it right.
Don't believe everything you read

The big old paper media organisations will never report bad property news because of the advertising revenue they receive from the Real Estate agencies. They're a dying publication so maintaining revenue is extremely important.

Keep reading websites like this one for an impartial view of the property market.

Or buy shares in Australasian banks, if you really keen to own a bit of a bank - but don’t take too much on given the risk banks face from emerging international competitors using technology to distribute and manage risk. Returns in dividend and PE are pretty good, and it’ll be challenging to impossible for an Nz bank to scale up in an environment where even big banks are under threat from innovation, and scale and strength is essential to raise capital internationally. Of course we could be missguided enough as taxpayers to take on the risk and implicit subsidy required, rather than invest in areas we have advantage or improves our advantages like education and infrastructure. We’re doing it with Kiwibank. Our desire to own a bank looks a bit our desire to own a railway even though innovation in transport will progressively replace rail.

Check out the latest news on kiwibuild

ANZ posted a fat profit so they're not doing poorly? So why the rise in interest rates .. interbank lending rates (LIBOR) have increased and the NZ dollar is trending down - these are arguably major contributing factors.

I wonder though, after the Australian banking inquiry and the RBNZ speaking out on capital requirements, perhaps our banks are just filling their mandated-capital-coffers and soon interest paid on term deposits will be lowered.

I would have thought Boomers to have fat savings accounts given their high employment rates, superannuation payments, rental property income and sometimes dividend earnings. Most wage earners pay banks KiwiSaver management fees and for every young saver, their are a few young workers regularly paying the banks overdraft/credit-card fees.

So, I would have thought the banks to be cashed up regarding capital requirements .. what's really going on? Just a fluctuation perhaps?

If the global capital markets are NOT a Pozi Scheme, central banks will tapper their quantitative easing and I believe this would increase term deposit rates here. However, if capital markets are a Poni Scheme, fresh capital will need to be printed at an ever increasing rate - as the nature of a Poni Scheme requires continuous fresh capital. Such QE would lower rates.

The whole fiat, petro-dollar, swift system is overdue for a reform and when it happens people don't want huge amounts of wealth tied up in term deposits. Lots to think about ..

Zack Brando