February snapshot: Term deposit rate cuts ease up in new year

In December last year, Mozo counted a huge 785 term deposit interest rate cuts. This January there have been 382 from 36 providers. So while term deposit interest rates are still heading downwards, it looks like banks might have started to ease up on the cuts.

What are the big four offering?

In the last month ANZ, Commonwealth Bank and Westpac all made cuts to term deposits. At the moment, the Commonwealth Bank offers the most competitive term deposit rate out of the four major banks. This is 0.45% p.a. with its 12-month term deposit. 

Although it should be noted that this is still less than the average 12-month term deposit interest rate, which is currently 0.58% p.a.* That’s taking into account all banks and credit unions available in the Mozo database.

Rates above 1%

For anyone looking to lock in a longer term deposit, interest rates above 1.00% are still available. Right now the most competitive rates in the Mozo database for terms from 1 to 5 years are:

• BankVic 1 year TD - 1.05% p.a.
• Judo Bank 2 year TD - 1.20% p.a.
• Judo Bank 3 year TD - 1.20% p.a.
• Judo Bank 4 year TD - 1.20% p.a.
• Judo Bank 5 year TD - 1.20% p.a.

To be eligible for these more competitive interest rates, you will have to deposit between $5,000 and $100,000 with BankVic and between $1,000 and $1 million with Judo Bank.

Savings strategy

With interest rates low across the board, now might be the time to come up with a savings strategy. Our tips to help you save include:

• Going 50:50. As suggested previously by the Mozo experts, one thing you could do is go 50:50. That means putting half your savings in a savings account and the other half in a term deposit. 
• Figure out what type of saver you are. Read our article to find out what type of savings method might work for you.
• Ditch unnecessary expenses. Review your outgoings and see if there are any unnecessary expenses you could ditch.
• Educate yourself. Improve your financial knowledge and see if you could save a bob or two.

Finally, if you are keen to lock your money away, head to Mozo’s compare term deposits page. Or take a look at the 1-year terms on offer below.

*Calculated from information available in the Mozo database, correct as of 29 January 2021.