Some of the top-rated term deposits in October 2024

If you're considering locking your cash into a term deposit, you may be weighing up how long you should commit your funds. Interestingly, many banks and ADIs have begun pulling back on offering higher interest rates for longer-term deposits. Instead, they’re now focusing on relatively higher rates for shorter-term deposits. This shift is likely in anticipation of the RBA’s potential rate cuts, with economists from the big banks expecting a possible reduction by early to mid-2025.

Banks that have recently cut their term deposit rates include the Big 4 (Commonwealth Bank, NAB, ANZ, and Westpac) as well as Bank of Queensland, ING, and HSBC. For banks, lowering rates on long-term deposits helps them avoid being locked into higher interest rates with new customers, especially if a rate cut is on the horizon. By offering higher rates on shorter-term deposits, they can more easily adjust their offers if rates change in the future. It's important to note that these changes typically only affect new term deposits or those being renewed at maturity. Existing deposits typically continue at their original rates until the term ends.

Despite the recent cuts in fixed deposit rates, it’s not all glum for new savers. RateCity research has revealed that more than 40 banks have increased rates on at least one term deposit since 1 September 2024, showing that there are still competitive rates available if you take the time to compare.

According to the RateCity database, around 85% of changes to term deposit rates since September were rate cuts, but there are still attractive offers, especially if you're looking at shorter-term deposits. By carefully considering term length, features, and benefits, you can find a term deposit that aligns with your personal savings goals.

For those hoping to secure rates in the 5% range, it’s important to note that these offers are becoming harder to find for long-term deposits. If you’re thinking of locking your savings away for a shorter period, now might be the right time to explore current offers before rates drop further as we move closer to a potential rate cut in 2025.

Highest deposit rates on a $25,000 deposit:

1-year term deposits

2-year term deposits