It’s been an exhilarating week for Australian savers as significant term deposit rate hikes have emerged from prominent players like G&C Mutual and Bank of Sydney, introducing several new market-leading rates.

Following Tuesday’s monetary policy decision, wherein the RBA confirmed that the cash rate target would remain at 4.35% until at least 18 June, various term deposit providers made notable adjustments. While the decision to maintain the rate was largely expected, the real intrigue arose from the accompanying Statement on Monetary Policy (SOMP), which forecasted that rates would persist at the current level until mid-2025.

Though this doesn’t necessarily imply a concrete plan by the RBA, experts like CommBank’s head of Australian economics, Gareth Aird, still anticipate rate cuts to commence in November. This projection has been significantly influenced by developments earlier this year, such as the unexpected rise in Q1 inflation, which have substantially impacted the economic outlook.

While the term deposit market has exhibited mixed trends over recent weeks, with top rates hovering around the 5.20% p.a mark, the movements this week have predominantly been upwards, with several new market-leading rates.

Commonwealth Bank Varies Rates by up to 35 bps

Commonwealth Bank adjusted rates on all terms 11 months or shorter by 0.05% downwards, while terms one year and above received a notable boost.

Despite Gareth Aird’s expectation of rate cuts by November, with the projected cash rate around 3.10% p.a by the end of 2025, the decision to increase rates on longer-term deposits doesn’t necessarily align with this outlook. However, with a top rate of 4.60% p.a, Commonwealth Bank still lags behind the highest on the market. This suggests that this round of increases might aim to fine-tune its savings and loan books.

Heartland Raises Rates by up to 20 bps

Heartland Bank, formerly Challenger, has emerged as the market leader for six-month and one-year terms. Offering a return of 5.25% p.a on six-month terms, and 5.35% p.a on one-year terms, Heartland’s rates outshine the competition by 15 basis points. This places them just 15 basis points away from the peak of 5.50% p.a reached last year.

For term deposit enthusiasts awaiting the opportune moment for the best one-year term returns in 2024, the decision now rests on whether to seize the current rates or speculate on further increases. While Heartland may follow a similar path to Credit Union SA, offering market-leading rates for a limited period before scaling back, there remains the possibility of rates climbing higher if other providers opt to follow suit.

Bank of Sydney Enhances Rates by up to 20 bps

Bank of Sydney has reasserted its position among the frontrunners, matching Heartland’s rates for six-month terms and surpassing them for nine-month terms. Having briefly touched 5.50% p.a last year, Bank of Sydney is a contender worth monitoring for individuals seeking the next market-leading rate. These rates are also applicable to business term deposits.

G&C Mutual Elevates Rates by up to 35 bps

G&C Mutual Bank now offers rates equivalent to Great Southern Bank for six-month terms, providing a return of 5.20% p.a. Though G&C’s rates were eclipsed by increases from Heartland and Bank of Sydney this week, they remain competitive, especially for deposits up to $99,999,999.

Gateway Bank Raises Rates by 10 bps

Gateway Bank has made a modest yet noteworthy move with a competitive offer exceeding the 5% threshold.

Other Movers

Bank First has raised rates by 10 bps, while ME Bank has reduced rates by up to 245 bps.

For inquiries or to take advantage of these lucrative term deposit rates, contact us at 1800 595 500 or info@vantagefinancial.com.au