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.
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|
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.