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Kiwibank the latest to raise some key term deposit rate rates, following rivals, but it's Rabobank with most of the market-leading positions for savers

Personal Finance / analysis
Kiwibank the latest to raise some key term deposit rate rates, following rivals, but it's Rabobank with most of the market-leading positions for savers
higher rate
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It appears there's more upward pressure in the term deposit (TD) marketplace, even if it isn't showing yet for home loans.

Kiwibank has raised two key TD rates; the popular nine-month rate is up 35 basis points (bps) to 2.00% pa, and its one year rate is up 10 bps to 2.30% pa.

Kiwibank follows Westpac, which followed BNZ, which raised rates for a wider series of terms, the top one being for one year where Westpac now offers 2.40%.

And that was followed in turn by Rabobank, which topped them all with 20 bps increases on top of what were already attractive offers, making the rural lender the clear market leader in the term deposit market. Rabobank now offers 1.85% for six months, 2.05% for nine months, and 2.45% for 12 months. Further out, its 3.35% for three years is also a clear market leader.

Wholesale interest rate markets are barely open Tuesday for the new week, and expectations are that these background rates will rise on the back of the signals from the US non-farm payrolls employment report. The imminent US Consumer Price Index data for January will be influential in market positioning when it is released Friday (NZ time).

Even though we are in a period of 'financial repression' (that is, savings returns are less than inflation), for term deposit savers it will always be better to get a higher rate than not, to minimise the pressure on their nest-egg. Savers will hope the Reserve Bank can win its battle with inflation because inflation is a thief of savings. Some short term pain will be the cost as almost all savers are aware. But it will be much worse if the Reserve Bank doesn't succeed in taming inflation.

An easy way to work out how much extra you can earn by switching is to use our full function deposit calculator. We have included it at the foot of this article. That will not only give you an after-tax result, you can tweak it for the added benefits of Term PIEs as well. It is better you have that extra interest than the bank.

The latest headline rate offers are in this table.

for a $25,000 deposit Rating 3/4
mths
5 / 6 / 7
mths
8 - 11
mths
  1 yr   18mth 2 yrs 3 yrs
Main banks                
ANZ AA- 1.10 1.50 1.70 2.20 2.20 2.50 3.00
ASB AA- 0.95 1.30 1.55 2.00 2.10 2.50 3.00
AA- 1.00 1.50 1.80 2.30 2.35 2.50 2.75
Kiwibank A 1.20 1.60 2.00
+0.35
2.30
+0.10
  2.50 2.75
Westpac AA- 1.00 1.60
+0.10
1.80
+0.15
2.40
+0.20
2.40
+0.20
2.50 3.00
+0.20
Other banks                
Co-operative Bank BBB 0.70 1.50 1.65 2.20 2.20 2.50 2.80
Heartland Bank BBB 1.25 1.75 1.65 2.00 2.10 2.50 2.75
HSBC AA- 0.85 1.35 1.50 1.85   2.25 2.60
ICBC A 1.35 1.75 1.85 2.30 2.35 2.75 3.10
Rabobank A 1.00
+0.10
1.85
+0.10
2.05
+0.20
2.45
+0.20
2.55
+0.20
2.90
+0.20
3.35
+0.20
SBS Bank BBB 1.00 1.65 1.85 2.25 2.25 2.55 3.00
A- 0.95 1.50 2.00 2.20 2.10 2.50 3.00

Term deposit rates

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15 Comments

Will be interesting to watch the impact this has on conservative/cash KiwiSaver funds. Most of them seem to make heavy use of term deposits, and I suspect the bigger providers get better than carded rates.

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0

Yes they will be in to these rates boots and all. Some cash funds returned less than 1% last year, end of this year they will be returning over 2.3%

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0

Inflation is a thief of savings (mildly true) . In current world of economics, the governments with their out of world policies are the biggest thiefs. 

The current politics is not helping the people, they are only helping their vested interests.

How many politicians these days meet the working class citizens? Not even 5% of their time.

Most of the time they are between bureaucrats, industrialists and corporates. Attending gala dinners and sponsorship events.

They are not in touch with what's happening on the ground, the people issues. So how will they ever make policies which help the poor and the ones who really need them. 

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6

It all about where the donations come from. 

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1

There is significant upward pressure on all swaps, worldwide and in NZ, and this is going to continue for the whole year at the very least. 

Current term deposit rates and mortgage rates will rise significantly in the next few months - this is just the beginning of a global process of renormalization of interest rates. 

I would not invest in any deposits for any term longer than 9-12 months, as by the time they expiry, rates will be much higher. On the other hand, if you are a mortgage holder you'd better fasten your seatbelt.  

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6

No seatbelts needed.  Interest rates won't go to skyrocketing figures that you all seem to wish for.  Will it go up?  Most likely.  But let's see how long this "inflationary" pressure stays for once COVID global supply chain disruptions disappear and global economies begin to stall again.  Rinse, Repeat.

Housing should be the least of your worries.  

 

-7

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0

yes keep your powder dry, dont take anything below 3%

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0

Please increase term deposits to at least match current inflation +6%, then we can talk. 

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5

How much money have you got in a TD ? probably zero right ? I don't need 6%. As long as rates never went negative I don't care.

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0

- Negative Real-Interest-Rates
- Declining NZD

People are better off buying Bitcoin or the Rear Earth Metals ETF.

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2

The ASB is really lagging behind in raising rates. Going to have to get on the phone for them to match the BNZ or the TD is going to move house.

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2

i suspect they don't really care. When the suits in ASBs HO don't have enough money they'll raise their td rates.  Enough money, lower rates than the others. Not enough equal to or higher. Supply and demand scenario.

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0

Their rates are often poor, but I have found you can phone them to negotiate. 

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0

yes they will match any of the big 4, sometimes they try and save face and go 0.005% less lol

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0

The 3 year rates are looking better but still not worth switching my emergency funds from the savings account. I'd lose any potential gains if I can to break the TD to gain access to that money.

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0