Our friends at the excellent Australian service YieldReport yesterday ran a review of the 'best' bank term deposit rates available from banks in that market.
This has prompted us to update our own review, especially as many market commentators think the RBNZ is about to signal an easing bias for New Zealand's Official Cash Rate on Thursday.
Our review clearly shows New Zealand still has a steeper yield curve than across the ditch, and our 'best rates' are higher by between +20 to +50 bps, and better as the term lengthens.
This shouldn't be much of a surprise, given the policy rates are +50 bps higher here than there.
But if Australia holds it rate, as many observers predict, and New Zealand cuts twice back to the 2% rate prevailing in Australia, then today's view may in fact be an ability to look into the future to see what may happen to Kiwi term deposit offer rates.
New Zealand's banking regulator started its core funding standards and requirements much earlier than their Aussie counterparts, and this essentially means New Zealand banks have already adjusted to a higher level of local and longer funding of their loan books.
Further, household deposit growth has been relatively stronger here than there, filling bank funding requirements and helping the core funding standards.
So perhaps it is something of a surprise that our rates are so consistently higher.
More so, perhaps, as YieldReport say there is a growing chance banks there will again be competing harder for local term deposits, something they were doing as recently as a year ago.
Perhaps the future will be one of declining New Zealand rate offers for term deposit savers (remembering that call savings account interest rates have all but evaporated, except for bonus savers and some notice saver accounts), and rising Australian offers.
Term deposit rate 'harmonisation' may be a 2016 outcome, who knows.
If this analysis strikes a chord for you, you can at least see what the 'benefits' could be by moving before the banks move again, and the costs if you don't.
Of course, there is more to an investment decision than simple offer rates. You may well be interested in how interest is paid or compounded. The more often it is, the lower the rate offer.
In addition, you should know that some other specialist banks also offer term deposits, some with rates higher than set out in the above graphic.
ICBC, Kookmin Bank, the Bank of India, and the Bank of Baroda are also banks that have local offers that may seem attractive compared with our main retail banks.
And of course there are many non-bank institutions - some with investment grade credit ratings (UDC, Liberty Financial and Medical Assurance Society) - that also should be assessed. Use our term deposit pages to start that review.
Falling interest rates are especially tough on savers. In a falling market, the balance of earnings availability and the term of the rate offered can involve stressful choices. Using term PIEs can also give a small extra after-tax effect.
Our unique term deposit calculator can help quantify what each offer will net you.
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