Recent term deposit rate changes shift the sweet spot options (2024)

19th Jun 24, 11:28ambyDavid Chaston

Hot on the heels of Kiwibank reverted its 6.10% one year term deposit (TD) special offer to 5.90%, BNZ has launched its own time-limited 'special' term deposit offer.

BNZ's is 6.15% for any term from 180-209 days, essentially six months.

But the offer will only last for 29 days until July 17.

At the same time, BNZ has tweaked two longer term rates, for 18 months and three years, down by five basis points.

The shifts by Kiwibank and BNZ have altered the sweet spot slightly for the main bank TD options. But there is actually little change in the wider bank market.

Wider still, the emergence of AMP offering term deposits creates another option.

Across all terms, the highest main bank term deposit offer has now become BNZ offer, 6.15% for six months.

And BNZ also has the highest nine month (6.10%) and 12 month (6.00%) offers from any main bank.

For all banks, the Rabobank 6.30% trumps all others. That's for a one year term.

Even wider, AMP is now offering term deposits, white-labeling the Heartland Bank options plus a premium. That makes its one year term deposit offer 6.30% as well, with Heartland Bank offering 6.20% for that term. For a shorter term AMP's offer is 6.35% for both six and nine months.

Topping all for institutions with an investment grade credit rating is Liberty Financial. 6.60% for six months, 6.85% for nine months, and 7.10% for one year. (Liberty's credit rating is the same as for Heartland Bank, SBS Bank, and Co-operative Bank).

(Higher rates again are available from others, but these have sub-investment grade credit ratings).

We should also point out that after-tax returns can be enhanced for some savers with higher tax rates, by the choice of PIE structures. Not all banks offer these, but most of the main banks do. For a nine month bank offer, they can be boosted by about ~30 basis points going this way. In some cases that will make up any difference, or more.

Always ask a bank for a better rate. Many bank staff have discretion to offer more than the advertised rate. (And check your bank's app offers as they too are often enhanced to retain you).

Use the term deposit calculator here, or the one below the table, to calculator your expected net returns.

The latest headline term deposit rate offers are in this table after the recent increases. (Updated with Co-operative bank change).

for a $25,000 deposit June 19, 2024	Rating	3/4 mths	5 / 6 / 7 mths	8 - 11 mths	1 yr	18mth	2 yrs	3 yrs
Main banks
ANZ	AA-	4.30	5.90	6.00	5.90	5.90	5.65	5.30
	AA-	4.40	5.90	6.00	5.90	5.70	5.40	5.20
	AA-	4.30	6.15 +0.10	6.10	6.00	5.85 -0.05	5.60	5.25 -0.05
	A	4.50	6.05	6.00	5.90 -0.20		5.60	5.25
	AA-	4.30	5.90	6.05	5.90	5.80	5.50	5.30
Other banks
Bank of China	A	5.50	6.20	6.20	6.15	5.95	5.70	5.35
China Constr. Bank	A	5.50	5.80	5.90	6.00	5.85	5.65	5.40
Co-operative Bank	BBB	4.30	6.05	6.00 -0.15	6.00 +0.10	5.80	5.70	5.35
Heartland Bank	BBB	5.50	6.25	6.25	6.20	6.00	5.90	5.80
ICBC	A	5.40	6.15	6.15	6.20	5.95	5.70	5.40
Kookmin Bank	A	4.40	5.60	5.70	6.00		5.00	4.60
	A	5.05	6.15	6.20	6.30	6.10	6.10	5.90
	BBB	4.20	6.10	6.15	6.05	5.95	5.60	5.30
	A-	4.25	5.90	5.90	5.90	5.80	5.50	5.30