CBA, Westpac, NAB and ANZ have cut term deposits this week as savers feel the sting of falling interest rates.
- CBA cut TD rates by up to 0.45%
- Westpac cut some TD rates by 0.20%
- NAB cut some TD rates by 0.10%
- ANZ cut TD rates by up to 0.20%
Analysis of the big four banks from RateCity.com.au shows that compared to March this year, term deposit rates are now up to 1.30 per cent lower.
1-year term deposit rate changes | |||
Mar-07 | Aug-16 | Difference | |
CBA | 2.20% | 1.50% | 0.70% |
Westpac | 2.30% | 1.55% | 0.75% |
NAB | 2.40% | 1.75% | 0.65% |
ANZ | 2.30% | 1.70% | 0.60% |
3-year term deposit rate changes | |||
Mar-07 | Aug-16 | Difference | |
CBA | 2.30% | 1.45% | 0.85% |
Westpac | 2.50% | 1.50% | 1.00% |
NAB | 2.50% | 1.65% | 0.85% |
ANZ | 2.50% | 1.65% | 0.85% |
5-year term deposit rate changes | |||
Mar-07 | Aug-16 | Difference | |
CBA | 2.40% | 1.50% | 0.90% |
Westpac | 2.80% | 1.50% | 1.30% |
NAB | 2.70% | 1.75% | 0.95% |
ANZ | 2.80% | 1.70% | 1.10% |
Notes: Rates based on $20K balance
If you put $20,000 into a 5-year term deposit with Westpac in March, you would earn a total of $2,800 in interest at maturity. However, if you put that same amount into the 5-year term deposit today, you’d earn $1,500 in interest, that’s $1,300 less.
RateCity.com.au research director Sally Tindall said these cuts are particularly tough on savers who rely on the interest they earn from term deposits.
“The banks keep chipping away at term deposit rates on the back of increasing expectations the cash rate will keep falling towards zero. This may force some Australians to seek out more risky investment options.
“With low interest rates and a sluggish economy, it’s unlikely we’ll see term deposit rates turn around anytime soon,” she said.
Interest earned on 1-year $20,000 term deposits | ||||||
Mar-07 | Aug-16 | Difference | ||||
CBA | $440 | $300 | $140 | |||
Westpac | $460 | $310 | $150 | |||
NAB | $480 | $350 | $130 | |||
ANZ | $460 | $340 | $120 | |||
Interest earned on 3-year $20,000 term deposits | ||||||
Mar-07 | Aug-16 | Difference | ||||
CBA | $1,380 | $870 | $510 | |||
Westpac | $1,500 | $900 | $600 | |||
NAB | $1,500 | $990 | $510 | |||
ANZ | $1,500 | $990 | $510 | |||
Interest earned on 5-year term deposits | ||||||
Mar-07 | Aug-16 | Difference | ||||
CBA | $2,400 | $1,500 | $900 | |||
Westpac | $2,800 | $1,500 | $1,300 | |||
NAB | $2,700 | $1,750 | $950 | |||
ANZ | $2,800 | $1,700 | $1,100 | |||
Notes: Rates based on $20K balance. Interest earned annually and paid at maturity.
