We looked at all bank term deposit offers in every week for all of 2023 to find the bank consistently offering the highest rates. It was close between two aggressive challenger banks

It is clear that in 2023, there was one bank that offered the best (highest) rates consistently across the main terms, for a term deposit less than $100,000.

Our review canvassed every week of the year, and ranked rate offers for 3 months, 6 months and 1 year.

Of course there were offers, usually 'special offers' for different terms. Westpac's 8 month 5.40% TD offer, and SBS Bank's 15 month offers come to mind. But these limited time offers are not covered in this survey.

The bank with the most consistent high offers was Rabobank.

Rabobank 'wins' this accolade even though it wasn't always the highest all the time. And it only offers interest-at-maturity, a downside.

For all these key terms Rabobank was closely followed by Heartland Bank. Heartland does compound rates monthly. And Heartland offers a Direct Call account offer level at a rate often above the Rabobank 90 day TD rate. These 'details' do make the final rankings a bit of a toss-up. But on balance, over the whole year it is Rabobank that came out on top.

Main Banks

For a 3 month term deposit it is ANZ that had the best overall rates in 2023 for a main bank. They got there by having the third highest rates in the July-September quarter of any bank. Otherwise there were fairly average. BNZ was second among main banks, helped by their April-June rate levels. ASB third because of better rates in the January-Match quarter. No main banks shone in the October-December period for a 3 month term deposit offer.

For a 6 month term deposit, it is Kiwibank with stand-out rate offers, and they maintained that advantage for the July-to-December period as well. They beat out BNZ who topped ASB. (But we perhaps should note the Westpac 8 month 'special'. It isn't covered in our survey, but if it was it still may not have changed the year's long rankings. But is was nice while it was available.)

For a 1 year term, generally rates rose about +1% from the start of the year to the end. Again, it was Kiwibank with the best overall offers, followed by BNZ and then ASB. Kiwibank and BNZ were consistent through the year as rates rose. ASB was only really competitive in the April to June quarter. And the same note needs to be made for Westpac who put their focus on a hot 15 month special, so is not covered in this survey.

Challenger Banks

Rate offers among this group are much more interesting. For example, SBS Bank's time-limited 6.7% offer was a standout.

But for a 3 month term deposit, both Rabobank and ICBC tied with the best overall offers. ICBC was clearly the highest in the January to March quarter, but both were pretty evenly matched for the rest of the year with usually Rabobank on top. Interest frequency makes no difference for a 3 month term.

For a six month term, interest frequency is still only a minor concern. Rabobank was the 'best' most consistently, but they were dogged by Heartland Bank especially on the March and September quarters. The Cooperative Bank made an effort to shine in the December quarter.

For a full one year term deposit offer, this is where Heartland's greater interest frequency paid off, matching (and sometimes besting) Rabobank's offers. We call this a virtual tie. They were followed by ICBC's offers, and in Q4 by the Cooperative Bank. For 7 weeks in February/March, another 5 weeks in July/August, and 2 weeks in October-November, SBS Bank made some notable offers - 6.70% in October was a real standout. But they weren't consistent enough to topple the Heartland/Rabobank tie. But the SBS Bank offers were nice when they were available.

(We should also note that if you had a term deposit of $100,000 for more, both the Bank of China, and the China Construction Bank would have featured in this review, batting near the top of the order.)

Some key notes

With the arrival of $100,000 per institution deposit insurance in 2024, term deposit savers might want to have accounts established at a number of banks. Setting up new accounts is usually very easy. You just have to be tolerant of banks' "know your customer" (AML/CFT) obligations. For some, you can prove your identity online, for others it might just be easier to make a branch visit. Any initial hassle will be minor and you will only have to do it once at any institution. Then you are 'set for life' and it's electronic and instantaneous thereafter.

The purpose of a review like this is not to suggest where you should invest. That will always be a question of the specific offer levels at the time you are ready to invest. But a review like this can help you with which banks you should prioritise having active accounts with. That way you will more likely be ready for a quick switch in (and out) at the time that makes best sense for you.

And for completeness you should know that InvestNow has an even easier system to switch back and forth between offers. The downside is that they don't always offer the top advertised rates, the difference being the fee for what they live on. And they only offer options for six banks, and that does not include Rabobank, or the Cooperative Bank, Kiwibank, TSB, nor Westpac - all banks that at some time or other in 2023 offered market-leading rates.

Then there are these same rates, from the same institutions, available in a PIE account. PIE accounts can help you minimise your taxes if your usual marginal tax rate is higher than 28%. Talk to your bank if this applies to you. It's a gimme.

Finally, our review only compared carded rates. You can often get better (higher) rates by asking call center or branch staff. Whether they respond with a better rate than on their published rate card is up to them and the discretion levels they have been granted within the bank. It never hurts to ask, and press them.