The yield on three-year bank bonds has climbed to around 5 per cent, the highest level since 2012.īanks are responding to this increase in wholesale funding costs by competing aggressively for retail and business deposits, which is putting upward pressure on interest rates.
Meanwhile, the big banks are finding it much more expensive to raise money in wholesale money markets. The account also has the option for automatic rollover, renewal or exit at the end of the term and you can opt to have the interest paid into an account at another bank. for 2 to 5 year deposit terms, when you have your interest paid annually. Straightforward banking for your business. The Bank of Melbourne Term Deposit offers interest rates starting from a 4.05 interest p.a. Tiered savings account with higher variable interest rates for balances starting at 50,000. Since May, the Reserve Bank has announced seven consecutive increases in official interest rates, which has pushed the official cash rate from an ultra-low 10 basis points to 2.85 per cent. High interest rate guaranteed for the term. It’s not nearly as high-profile as the tussle for market share in the coveted home loan market, but behind the scenes the big four banks – and Macquarie – are engaged in an equally fierce battle for both household and business deposits.Īnd the higher interest rates they’re having to pay to attract – and keep – deposits looks set to erode some of the benefit they’re getting from this year’s sharp rise in interest rates.Īlready, the effect of this battle for term deposits is evident in the big banks’ latest annual results.
