Term deposit savers are being offered higher rates but the rises are more modest overall than what borrowers face. However there are standout offers from selected institutions across all terms

The news has been full of stories about interest rate rises on home loans. Not only are fixed rates rising, banks have also been raising floating rates.

At the same time, banks have been changing term deposit rates, although for shorter terms it is not always up.

The changes have not been as aggressive as for home loans, but they have been widespread.

A quick check of the interactive graphs at the bottom of this story shows that average bank rates are moving up faster for longer terms, but moving very little for shorter terms.

However, there are some notable exceptions and this story highlights them.

And some of the exceptions feature rates for terms that don’t fit neatly into the graph options, and savers will want to identify them too.

Banks are adept at focusing ‘specials’ in places that makes them look unique and attractive. But they do need to be seen in a broader view.

And with it being Chinese New Year, banks have or will be bringing out ‘specials’ aimed around this seasonal event – you can identify those because the rates offered will end in an ‘8’.

Among banks, these are the term deposit rates that stand out at present:

– Heartland Bank’s 3 month rate at 3.10%

– Kiwibank’s 6 month rate at 3.75%

– SBS Bank’s 9 month rate at 3.85%

– The Co-operative Bank’s one year rate at 3.70%, their 18 month rate at 3.75%, and their 3.85% rate for two years.

– Both SBS Bank and TSB Bank offer 4% for a three year term.

– for four years, a number of banks are offering 4.10% including ANZ, the Co-operative Bank, ICBC and TSB Bank.

– for five years. both ANZ and ICBC are offering 4.20%.

Among investment grade rated finance companies, the rates from Liberty Finance also stand out.

Comparing the sharp market moves higher for home loans with the changes in term deposit offers, banks do seem to have some catching up to do for savers.

Don’t forget to shop around and ask for better-than-carded rates. Negotiate. We often hear that +0.10% or +0.15% can be added at some banks if you press them. A lot however will depend on the size of your business and the term you are prepared to lock it up for.

For higher rates, you need to asses the offers of institutions with a lower credit rating. Rate offers rise significantly from non-bank institutions with sub-investment grade (“junk”) credit ratings.

As we have earlier noted, savers may wish to think through the wisdom of locking up of funds for longer terms in what seems to be a turning rate environment. This situation should have savers thinking through the risk/reward scenarios.

Use our deposit calculator to figure exactly how much benefit each option is worth; you can assess the value of more or less frequent interest payment terms, and the PIE products, comparing two situations side by side.

All carded, or advertised, term deposit rates for all institutions for terms less than one year are here, and for terms one-to-five years are here.

Term PIE rates are here.

The latest headline rate offers are in this table.

for a $25,000 deposit Rating 3/4 mths 5/6/7 mths 8/9 mths 1 yr 18 mths 2 yrs 3 yrs
Main banks                
AA- 3.00 3.30 3.60 3.35 3.60 3.80 3.90
ASB AA- 3.00 3.65 3.35 3.20 3.50 3.65 3.80
AA- 3.00 3.15 3.68 3.25 3.60 3.75 3.80
Kiwibank A+ 3.00 3.75 3.20 3.65   3.40 3.60
Westpac AA- 3.00 3.50 3.25 3.40 3.20 3.70 3.50
Other banks                
BBB 2.95 3.40 3.50 3.70 3.75 3.85 3.95
Heartland Bank BBB 3.10 3.30 3.70 3.40 3.40 3.40 3.70
HSBC Premier AA- 2.50 2.80 2.90 2.90   2.90 2.95
ICBC A 3.05 3.35 3.65 3.45 3.65 3.75 3.85
RaboDirect A 2.85 3.40 3.35 3.40 3.40 3.45 3.80
RaboDirect BBB 2.75 3.55 3.85 3.60 3.70 3.80 4.00
A- 3.00 3.30 3.75 3.50 3.70 3.80 4.00
Selected fincos                
F&P Finance BB* 3.10 3.80 4.00 4.10 4.15 4.25 4.35
RaboDirect BBB 3.40 3.95 4.15 4.65 4.85 5.00 5.40
RaboDirect BBB 3.00 3.50 3.75 3.80 3.80 3.80 3.90
  * = the only credit rating in this review that is not investment grade.  

Rates in this table are the highest offered by each institution for the terms listed. You however will need to chech how often interest is credit or paid. That important factor is not filtered in the above table and rates with various interest payment/credit arrangements are mixed here. However our full tables do disclose the offer basis.

Our unique term deposit calculator can help quantify what each offer will net you.

Term deposit rates

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for(i=0;i

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