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CBA chasing down market leaders with 4% term deposit rates
Australia’s largest bank, CBA, is chasing down the term deposit market leaders by today hiking rates by up to 1.75 percentage points.
As a result, CBA’s highest term deposit rate is now 4 per cent, for terms of 2- to 5-years for balances of $50,000 to $2 million.
Today’s CBA term deposit rate increases: $50,000 deposit
| Term | Increase %-points | New rate |
| 9-months | +0.80% | 2.30% |
| 12-months | +1.35% | 3.35% |
| 2-years | +1.75% | 4.00% |
| 3-years | +1.75% | 4.00% |
| 5-years | +1.50% | 4.00% |
Source: RateCity.com.au. Rates are for deposits of $50,000 to $2M, accrued annually, or at end of term.
RateCity.com.au database analysis shows just four banks are offering term deposit rates above 4 per cent; Judo Bank, Macquarie Bank, AMP and Rabobank Australia.
Markets leaders - Highest term deposit rates: $50,000 deposit
| Term | Bank | Rate |
| 9-months | AMP Bank | 3.25% |
| 12-months | Community First | 4.00% |
| 2-years | Judo Bank | 4.45% |
| 3-years | Judo Bank | 4.60% |
| 5-years | Judo Bank | 4.85% |
Source: RateCity.com.au.
Australia’s second largest bank, Westpac, today also hiked its 12- to 23-month term deposits by 0.10 percentage points, to a rate of 3.45 per cent.
Impact of RBA rate hikes on big four bank term deposit rates
All big four banks have substantially increased their term deposit rates, following six consecutive months of RBA cash rate hikes.
Analysis from RateCity.com.au shows the big four banks’ highest term deposit rates were between 0.20 and 0.30 per cent before the RBA hikes began in May.
CBA’s highest term deposit rate is now 4 per cent, which is more than 13 times higher than it was six months ago.
Big four banks: Pre-May RBA highest term deposit rates Vs now
| Bank | Pre-RBA hikes (1 May) | Now | Difference % points |
| CBA | 0.30% (1-5 yrs) | 4.00% (24-60-mths) | +3.70% |
| Westpac | 0.30% (2-5 yrs) | 3.45% (12-23 mths) | +3.15% |
| NAB | 0.30% (2-5 yrs) | 3.25% (12 mths) | +2.95% |
| ANZ | 0.20% (1-5 yrs) | 3.00% (11 mths) | +2.80% |
Source: RateCity.com.au.
RateCity.com.au research director, Sally Tindall, said: “CBA is back in the business of chasing after people’s cash with enormous term deposit hikes.”
“At 4 per cent, CBA’s highest term deposit is now over 13 times what it was before the RBA hikes began in May,” she said.
“This is a clear sign from Australia’s largest bank that it wants more deposits and is willing to reward customers who are happy to lock their money up with CBA.
“The latest APRA statistics show CBA already has the lion’s share of the country’s cash, with a record $356.4 billion in deposits, but it appears the bank wants more.
“With mortgage funding costs rising, deposits are becoming an increasingly important part of the funding mix for banks.
“Currently, just four banks are offering term deposit rates above CBA: Judo Bank, Macquarie Bank, AMP and Rabobank. The highest rate on offer is 4.85 per cent for 5 years from Judo Bank.
“CBA’s supersized term deposit hikes will likely force other banks to significantly boost their rates if they want to remain competitive.
“If you’re going to lock up your money in a term deposit, make sure you get a competitive deal. The cash rate is still on the rise, so your term deposit rate should reflect this,” she said.
Highest 1-year term deposit rates
$50,000 deposit
| Bank | Rate |
| Community First | 4.00% |
| Judo Bank | 3.90% |
| AMP Bank | 3.80% |
| Gateway Bank | 3.70% |
Highest 2-year term deposit rates
$50,000 deposit
| Bank | Rate |
| Judo Bank | 4.45% |
| AMP | 4.15% |
| Macquarie | 4.05% |
| CBA | 4.00% |
Highest 3-year term deposit rates
$50,000 deposit
| Bank | Rate |
| Judo Bank | 4.60% |
| AMP | 4.30% |
| Macquarie | 4.05% |
| CBA | 4.00% |
Source: RateCity.com.au.
Disclaimer
This article is over two years old, last updated on October 10, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent term deposits articles.
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