ANZ follows some of its main rivals lower with -10 to -20 bps cuts to seven specific terms, and a +5 bps rise for one term

Term deposit rates are still moving down.

We have previously reported on cuts by Kiwibank and TSB (and a rise by SBS Bank), and now ANZ has moved lower.

New Zealand's largest bank has taken -15 bps off its five month rate, reducing it back to 3.00%.

It has also taken -15 bps off its eight month rate, setting 3.30% as the new level.

It has added +5 bps to its nine month rate, raising it to 3.40%.

And for terms of 18 months and two years it has cut -10 bps, with the new offers at 3.45% and 3.55% respectively.

The cuts for three years and four years are greater, down -15 bps, to 3.65% and 3.75% respectively.

For five years, it has cut by -20 bps with the new offer rate now just 3.80%.

These changes mean they no longer offer any term deposit rates of 4% or greater.

However, by using their term PIE fund options (which have the same listed rates as term deposits), if you are on a 33% income tax rate, the term PIE equivalent pre-tax rate for fixed periods of four and five years will still exceed 4%.

These ANZ changes don't really set up much of a disadvantage for them against their main rivals, some of whom had already moved.

But it does make the longer term ASB and Kiwibank rates look more attractive, because they haven't moved lower yet. It is likely they will soon, however.

Wholesale rates are trending lower, and bond markets are also pricing lower yields.

Using our deposit calculator to figure exactly how much benefit each option is worth you can assess the value of more or less frequent interest payment terms, and the PIE products, comparing two situations side by side.

All carded, or advertised, term deposit rates for all financial institutions for terms of less than one year are here, and for terms of one-to-five years are here.

Term PIE rates are here.

The latest headline rate offers are in this table.

for a $25,000 deposit Rating 3/4 mths 5/6/7 mths 8/9 mths 1 yr 18 mths 2 yrs 3 yrs
Main banks                
AA- 3.00 3.25 3.40 3.40 3.45 3.55 3.65
ASB AA- 3.00 3.25 3.40 3.45 3.55 3.65 3.80
AA- 2.90 3.25 3.25 3.40 3.45 3.50 3.65
Kiwibank A 2.95 3.40 3.35 3.45   3.65 3.80
Westpac AA- 2.95 3.25 3.30 3.45 3.45 3.50 3.65
Other banks                
BBB 2.95 3.25 3.35 3.40 3.50 3.60 3.70
Heartland Bank BBB 3.10 3.45 3.60 3.60 3.70 3.80 3.85
HSBC Premier AA- 2.60 2.90 2.90 2.90   2.90 3.00
ICBC A 2.95 3.25 3.55 3.35 3.75 3.85 3.95
RaboDirect A 2.80 3.30 3.30 3.35 3.65 3.80 3.90
RaboDirect BBB   3.30 3.65 3.45 3.60 3.70 3.90
A- 2.90 3.15 3.20 3.25 3.45 3.60 3.70
Selected fincos                
Liberty Finance BBB- 3.60 3.95 4.25 4.30 4.35 4.40 4.45
UDC BBB 2.85 3.35 3.50 3.60 3.60 3.75 3.75

Rates in this table are the highest offered by each institution for the terms listed. You however will need to check how often interest is credited or paid. That important factor is not filtered in the above table and rates with various interest payment/credit arrangements are mixed here. However, our full tables do disclose the offer basis.

Our unique term deposit calculator can help quantify what each offer will net you.

Term deposit rates

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6 Comments

How about a better deal for the elderly/retired?

Come on banks: show us your spirit. (We've heard enough about your profits.)

TTP

TTP, be careful what you ask for. Banks are not charitable organisations. Being that our banks are flush with domestically sourced deposits, there is less need to compete for them.

As you know, most funds are invested at shorter terms. There's nothing more toxic to the borrower if banks are forced to pass on costs attributed to them having to source more expensive funds offshore. This at a time asset prices are falling. (refer Australia)

Let's hope the current relatively stable environment continues.

They already get a pretty good deal to be quite honest.

The banks are so desperate now to keep the lending ponzi going that they are once again penalising those with cash deposits. These very same depositors who are keeping the banks cash/lending ratio's in check! Thanks! I recollect an article quite recently on interest explaining that because NZ banks cash deposits are so high we don't really have a mortgage debt problem in NZ. These moves to penalise savers just go to show in my opinion that we do.

You could always put your dough in the NZX and get 3-4% capital gain + 5% dividend returns. Until June of this year you could have put your money in Harmoney and got 9% ROI...

Putting it in a balanced Fund such Milfords seem to be a better option for 7%+ return if you are looking at 3-5 year term.