Banks are trimming interest rates for savings accounts and term deposits. We update the latest changes

Banks are trimming interest rates for savings accounts and term deposits. We update the latest changes

The Reserve Bank has cut the Official Cash Rate by 25 basis points. Banks have come out quickly to reduce their floating mortgage rates by much less than 25 basis points.

Banks have also started to reduce savings account and term deposit offers, following the OCR cut.

This story is a way to summarise what has been cut, by whom, and by how much.

ANZ has cut its 90 day term deposit (TD) by -15 bps, and its four month TD rate by -25 bps. It also cut its 60 day TD by -25 bps to 1.25% (not in the table below).

ANZ has also advised that on Monday, May 27, it will cut -25 bps off its Business Premium Call account rate, taking it down to 0.10%.

ASB actually got in early, cutting almost all its term deposit rate offers on Tuesday, May 7. So far, no additional cuts have been advised.

Westpac has cut between -10 and -20 bps for most of its term deposit rates for terms of less than one year.

Kiwibank hasn't cut term deposit rates yet, but it has announced a range of cuts to savings accounts. They are about to;

  • decrease 90 Day and 32 Day Notice Savers by 15bps to 3.10% and 2.10%
  • decrease online call and business online call by 15bps to base rate. No change to bonus rate.
  • decrease Fast Forward saver top tier by 5bps. No change to bonus rate.
  • decrease Front Runner and Business Performer top tier rates by 15bps.
  • decrease Backup Saver by 5bps
  • decrease First saver by 15bps
  • decrease AMP S41 account earned interest rate by 90bps.

BNZ has cut almost all their term deposit rates.

(More soon as additional changes are announced).

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).

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.

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
8 / 11
  1 yr   18mths 2 yrs 3 yrs
Main banks                
ANZ AA- 2.75 3.25 3.35 3.25 3.20 3.20 3.25
ASB AA- 2.75 3.20 3.10 3.15 3.10 3.10 3.15
AA- 2.75 3.25 3.20 3.15 3.10 3.10 3.15
Kiwibank A 2.90 3.30 3.30 3.30   3.20 3.25
Westpac AA- 2.75 3.05 3.05 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
Heartland Bank 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
RaboDirect A 2.80 3.30 3.30 3.30 3.30 3.30 3.40
RaboDirect 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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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?

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My condolences.

There is a case to be made that lowering interest rates actually stymies demand, economic growth and employment. It makes people less willing to spend and consume and into harder savers. Elderly need to save more for retirement and would be first home buyers need to save more for deposits. Businesses might be more able to invest but if there is lack of demand they may not bother.

Yes. Look at Japan. But I don't believe Japanese people base their outlook and behavior around interest rates to the same extent we do. This is behavioral economics in action and how the price of money influences our behavior is still largely misunderstood. I'm a big fan of conjoint analysis as used in market and consumer research to understand how people make trade-offs.

Latest Westpac ad says
Grow Saving........Save LivesThey then say that they will donate $10 for every new 12 month term deposit that is made,to the Helicopter Appeal;They offer 3.15%
I say how about saving my life and offering me 7.25%.Thanks

I fondly remember getting 8.25% in my online account back in 2003 - although that was the old National Bank.

The only reason we have a lowering of the interest rate, which will help nobody, is because the government is not using fiscal policy to help the economy and therefore the country. They are all nuts!

Stifling Interest rate growth will stifle taxation and demand and demand further rises in taxation from other quarters ...we is bordering on nowt in the Pot, except flog to others.

But we could I suggest go after the Capital Gains Tax.......for only Wellingtonians they are mostly Public Servants and Government Hold out yer hand takers...often called MP's....but ....they get cash up front, no matter what....they screw up, or down. and that includes Houses their Interest. (Kiwibuild or not).

So that may sit well with us poor citizens not embroiled in Housing fiascos and Mud Slinging in Dairy Land.

Orr we could put in a Tourist Tax, no "Free Entry" to overseas citizens who do not pull their weight...Orr pay any interest on Free-hold Houses, cos they washed up here, whilst in their Prime.,, and got lucky with borrowings...whatsoever. Nor had to work a Jot. (I seem to recall a Leader Nationally being led up the Garden Path... being one...but I digress)..

Just a few suggestions to stir the Pot....if Taxes go Short.........and an insignificant rate is called for....and Houses fall....not that they ever will...mind you........God forbid.....and Ministers pray tell, will never allow.
Small interest, big loans.....big debts, all bode well....But we may need money in the Pot to compete with others.......already flowndering.....over their miniscule rates....way lower than ours...Already.

Tis a World Wide phenumnenummmm;

Debt is such a stupid we need more...I ask....all here and now....reading between the lines.

Orr is there room for more movement, Orr is it just an upset tummy...they are worried about....and no idea what to do with his 600K per diem....when the tummy erupts....and Jacindas ...for that matter....overspends her pennies.....she thought was hers.....not ours.

Think....big, or go Home...aint workin....

" You however will need to check how often interest is credited or paid. "

Have you thought about listing the rates as Annual Equivalent Rates aka Effective Interest Rates, so that you can compare compounding and non compounding and compounding at different frequencies. It is required in the EU for banks to show the AER prominently so that consumer can compare what is on offer.

Much easier to have one table with rates you can compare at a glance, than to have a table with the raw rates and then footnotes to the compounding details, and then have to get the calculator out to meaningfully compare rates in the table.

Pretty sure all rates given are annualised rates.

but they are not annual equivalent rates. A 10% rate that is paid to your balance weekly, is better than 10% paid at the end of a 12 month term.

AER rates mean you can compare the actual annual return regardless how often it is paid/compounded.

They needed to bolster the housing market ahead of legislation to ring fence rental losses, which will hurt many speculators and make highly geared housing investment even more dependent on capital gain.

risk of bail in +plus bugger all interest = better off in a vault