ASB has taken between -10 basis points and -20 basis points off all its term deposit rate offers for durations of three months and longer. The cut is across the board.
It is not the first to move to this new lower level, but now has the lowest overall offer set of any bank.
This change comes one day ahead of the RBNZ Official Cash Rate rate review, one where some economists are picking a policy rate reduction as well.
And all these bank term deposit cuts come after wholesale swap rates remain pretty stable; certainly those wholesale rates are almost unchanged since the start of April.
The more likely motivation for this shift lower is the market pressure from the falls in home loan interest rates. Bank term deposit offer rates are moving lower to protect bank margins. (And recent half year reports from the three majors shows profits at record high levels).
With tepid loan demand growth, and still-positive deposit growth, there is little competitive pressure for any bank to offer higher interest rates - the deposit monies just keep flowing in.
ASB is just the latest to trim term deposit offers, and some of the other recent moves are in the table below.
These changes leave new institutions with the most competitive rates. ANZ, BNZ and Kiwibank have rates a shade higher than ASB and Westpac now. Among the challenger banks, Heartland's current offers are now market-leading.
But from an investor point of view, there remains only a skinny range on offer.
The updated rates in the table below 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 table and rates with various interest payment/credit arrangements are mixed here. However, our full tables do disclose the offer basis. (The codes are explained here.)
One other item is worth mentioning. The brand 'RaboDirect' has now been retired, replaced with the parent name, Rabobank. There is no consequence for customers or potential customers, access to all their services remains unchanged.
Our unique term deposit calculator can help quantify what each offer will net you.
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.
The latest headline rate offers are in this table.
| for a $25,000 deposit | Rating | 3/4 mths | 5 / 6 / 7 mths |
8 / 11 mths |
1 yr | 18mths | 2 yrs | 3 yrs |
| Main banks | ||||||||
| ANZ | AA- | 3.00 | 3.25 | 3.35 | 3.25 | 3.20 | 3.20 | 3.25 |
 |
AA- | 2.75
|
3.20
|
3.10
|
3.15
|
3.10
|
3.10
|
3.15
|
 |
AA- | 2.90 | 3.25 | 3.35 | 3.25 | 3.20 | 3.20 | 3.25 |
| Kiwibank | A | 2.90 | 3.30 | 3.30 | 3.30 | 3.20 | 3.25 | |
 |
AA- | 2.90 | 3.15 | 3.15 | 3.15 | 3.15 | 3.15 | 3.15 |
| Other banks | ||||||||
 |
BBB | 2.90 | 3.20 | 3.25 | 3.30 | 3.20 | 3.20 | 3.25 |
 |
BBB | 3.15 | 3.35 | 3.45 | 3.45 | 3.50 | 3.50 | 3.55 |
| HSBC Premier | AA- | 2.60 | 2.90 | 2.90 | 2.90 | 2.90 | 3.00 | |
| ICBC | A | 3.05 | 3.25
|
3.25
|
3.25
|
3.20
|
3.20
|
3.25
|
 |
A | 2.80 | 3.30 | 3.30 | 3.30
|
3.30
|
3.30
|
3.40
|
 |
BBB | 2.90 | 3.25 | 3.25
|
3.30
|
3.20
|
3.20
|
3.25
|
 |
A- | 2.85 | 3.10 | 3.15 | 3.15 | 3.15 | 3.15 | 3.25 |
Term deposit rates
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1 Comments
Soon be time to quit the banks and transfer money into a safety deposit box down on Albert Street - It’s a lose lose situation at the moment! Appallingly low interest rates for those that have cash along with the chance of losing a significant part of it should one of our banks need bailing in!
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