On Wednesday, we will get the December CPI data. The average analyst expectation is for inflation to have been running at 7.1% in the December quarter.
Unless something materially changes, it may come in lower in Q1-2023 as the inflationary trend eases.
Meanwhile, a challenger bank launched a 6% term deposit offer for a one year term. That will make savers more motivated to get their money working harder.
We haven't been this close to the CPI rate for a 1 year TD in a very long time.
In fact, the new SBS Bank 6% offer is the highest from any bank since November 2008.
And it is miles above the equivalent main bank offers for a one year term of about 5.30% from BNZ and Westpac, and 5.20% from ANZ and Kiwibank. ASB offers 5.25% for that term.
But even at 6%, the offer isn't beating inflation, and after taxes, it will be even more in deficit for a 'real' rate. But the speed and quantum of the shift starting 2023 is very notable.
The highest offers for a 3 or 4 month term deposit are from China Construction Bank at 3.90% pa. For terms of between 5 and 7 months, they and ICBC offer 4.95% pa. For nine months the top rate is from SBS Bank at 5.50%, and they now offer this 6.00% pa for a one year term, the market leading rate across all terms and all banks. No rate from any bank for a longer term is higher.
An easy way to work out how much extra you can earn 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, especially if you are in the 39% tax bracket - PIEs are taxes at 28% flat.
The latest headline rate offers are in this table after the recent increases.
| for a $25,000 deposit December 23, 2022 |
Rating | 3/4 mths |
5 / 6 / 7 mths |
8 - 11 mths |
1 yr | 18mth | 2 yrs | 3 yrs |
| Main banks | ||||||||
| ANZ | AA- | 3.10 | 4.55 | 5.00 | 5.20 | 5.20 | 5.25 | 5.25 |
 |
AA- | 3.30 | 4.55 | 5.10 | 5.25 | 5.25 | 5.25 | 5.30 |
 |
AA- | 3.30 | 4.70 | 5.15 | 5.30 | 5.25 | 5.25 | 5.25 |
 |
A | 3.20 | 4.65 | 5.10 | 5.30 | 5.25 | 5.25 | |
 |
AA- | 3.20 | 4.65 | 5.00 | 5.30 | 5.25 | 5.25 | 5.25 |
| Other banks | ||||||||
| China Constr. Bank | A | 3.90 | 4.95 | 5.35 | 5.65 | 5.35 | 5.35 | 5.35 |
| Co-operative Bank | BBB | 3.00 | 4.75 | 5.00 | 5.25 | 5.25 | 5.30 | 5.30 |
| Heartland Bank | BBB | 2.80 | 4.75 | 5.10 | 5.30 | 5.10 | 5.20 | 5.20 |
| HSBC | AA- | 3.15 | 4.45 | 5.00 | 5.15 | 5.15 | 5.10 | 5.10 |
| ICBC | A | 3.65 | 4.95 | 5.35 | 5.65 | 5.25 | 5.25 | 5.25 |
 |
A | 3.30 | 4.60 | 5.00 | 5.50 | 5.25 | 5.30 | 5.30 |
 |
BBB | 3.00 | 4.35 | 5.50 | 6.00 | 5.10 | 5.15 | 5.20 |
 |
A- | 3.45 | 4.45 | 4.70 | 5.20 | 5.20 | 5.25 | 5.25 |
Term deposit rates
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12 Comments
Inflation expected to remain 'red hot' - fresh data set to show no easing of tight labour market.....expected to have become more domestically driven (Jenée Tibshraeny)
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