With wholesale interest rates turning higher, Kiwibank tests the waters with a new 'special' one year term deposit rate offer that is +15 to +25 bps higher than its rivals

Home loan interest rates might be still shifting lower, but one major bank is raising its featurered term deposit rate.

Kiwibank has raised its featured one year rate by +15 bps to 3.60%.

This is the higher rate for a one year term offered by any major bank, and it equals the rates offered by both Heartland Bank and UDC.

The average one year rate for all banks for a one year term deposit has only been 3.36% so this new Kiwibank rate opens up a +15 to +25 bps advantage for them in the eyes on term deposit clients. Kiwibank have describes the new rate as a 'special' so it is likely to be only for a limited time if no other bank moves to match it.

Even thoiugh wholesale rates had been drifting lower, banks had generally been holding terms deposit rates unchanged.

But now wholesale rates have started shifting higher over the past two weeks and this Kiwibank 'special' may be in part a reflection of that shift.

The 3.60% rate is for interest-at-maturity, and for term deposits of $10,000 and higher. Lower rates apply for monthly or quarterly interest arrangements, and for balances below $10,000.

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 3.45 3.50 3.65
AA- 2.90 3.25 3.25 3.45 3.40 3.45 3.55
Kiwibank A 2.95 3.45 3.40 3.60   3.55 3.70
Westpac AA- 2.95 3.25 3.40 3.40 3.45 3.50 3.65
Other banks                
BBB 2.95 3.25 3.35 3.40 3.45 3.55 3.65
Heartland Bank BBB 3.20 3.35 3.55 3.50 3.60 3.70 3.80
HSBC Premier AA- 2.60 2.90 2.90 2.90   2.90 3.00
ICBC A 2.80 3.40 3.40 3.50 3.60 3.70 3.80
RaboDirect A 2.80 3.30 3.30 3.35 3.55 3.55 3.70
RaboDirect BBB 3.00 3.30 3.40 3.45 3.45 3.60 3.70
A- 2.90 3.15 3.20 3.25 3.45 3.50 3.65
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

Select chart tabs »
The '1 year %' chart will be drawn here.
Loading...
(bank averages)
The '30 days %' chart will be drawn here.
Loading...
(bank averages)
The '90 days %' chart will be drawn here.
Loading...
(bank averages)
The '6 months %' chart will be drawn here.
Loading...
(bank averages)
The '2 years %' chart will be drawn here.
Loading...
(bank averages)
The '3 years %' chart will be drawn here.
Loading...
(bank averages)
The '4 years %' chart will be drawn here.
Loading...
(bank averages)
The ' 5 years %' chart will be drawn here.
Loading...
(bank averages)

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

1 Comments

Tide is turning.... hold on to the expectation that interest rates will be low for longer..