At the same time it cut its 6 month and one year home loan rates, and raised its two year mortgage rate, it has also cut its term deposit rates across the board to 12 month.
The new rates drop their offers to market lows for the key rates.
Their new three month rate is now 1.90% and a -5 bps reduction.
Their new six month rate is now 2.60% and a drop of -15 bps.
And their new one year rate is now 2.55% and a -5 bps reduction.
ASB now offers the lowest term deposit rates of any major bank for all terms. ASB has tended to lead the savings rate offers down, and more recently they have been followed when they cut lower. Time will tell with this latest reduction.
At this time, ANZ and Kiwibank are the main banks with marginally higher rates in key tenors.
Compared with challenger banks, only HSBC offers lower rates than ASB.
After these changes, the highest term deposit rates are offered by both Heartland Bank and ICBC.
But no main bank offers any tenor at 3% or above, all the way out to five years.
Almost no bank is making any attempt to offer higher rates for longer terms. In fact, in most rate offer cards, the highest rates are now at about the nine month tenor. 'Specials' are rare.
The latest reductions come even as wholesale rates have started turning back down after a short firming period.
Given inflation is running at 1.5%, after-tax, after-inflation yields from term deposits are likely to approach zero at some point if this trend continues.
For readers looking for risk-free returns, we should also note that the 1.00% offer for the Government's Kiwi Bonds (for fixed 6 month, one year, two year and four year terms) is now available.
That the Government now offers Kiwi Bonds at a -50 bps discount to inflation is not a great signal to those who need low-risk interest income. That will mean capital decumulation by retired people will be accelerating. Longer life expectancy may well put earlier pressure on social services and income support than Treasury is expecting.
The updated rates in the table below are the highest offered by each institution for the terms listed. You will, however, need to check how often interest is credited or paid. That important factor is not filtered in the table and rates with various interest payment/credit arrangements are mixed here. However, our full tables do disclose the offer basis. (The codes are explained here).
Our unique term deposit calculator can help quantify what each offer will net you.
The latest headline rate offers are in this table.
|for a $25,000 deposit||Rating||3/4 mths||5 / 6 / 7
|8 - 11
|1 yr||18mths||2 yrs||3 yrs|
* = 15 months