Looking at historical term deposit rates can help you understand that rates are constantly changing and how the official cash rate also impacts term deposit rates. As the official cash rate has continued to fall over the last decade, so too have term deposit rates.
Let's take a look st some examples of old term deposit rates offered by Australia's biggest four banks, and how that compares to their rates now.
Here are some of NAB's Term Deposit rates from 2011 through to 2014, and now.
| Date | 6 month term | 12 months | 2 years |
|---|---|---|---|
| 6/6/11 | 6.11% p.a | 6.18% p.a. | 6.30% p.a. |
| 2/1/12 | 5.75%.p.a. | 5.24% p.a. | 5.21% p.a. |
| 4/6/12 | 4.97% p.a. | 5.00%p.a. | 5.10% p.a. |
| 7/1/13 | 4.40% p.a. | 4.25% p.a. | 4.40% p.a. |
| 3/6/13 | 3.98% p.a. | 4.00% p.a. | 4.20% p.a. |
| 6/1/14 | 3.70% p.a. | 3.75% p.a. | 3.90% p.a. |
| Current rates | 3.6% | 4.5% | 4% |
Here are some of ANZ's Term Deposit rates from 2011 through to 2014, and now.
| Date | 3 months | 12 months | 3 years |
|---|---|---|---|
| 6/8/11 | 5.60% p.a. | 6.00% p.a. | 6.20% p.a. |
| 20/3/12 | 5.30% p.a. | 5.00% p.a. | 5.30% p.a. |
| 10/10/13 | 2.50% p.a. | N/A | 3.30% p.a. |
| 25/4/14 | 2.50% p.a. | N/A | 3.30% p.a. |
| Current rates | 0.05% | 0.15% | 0.15% |
See past Westpac's term deposit rates and the current rates.
| Amount $5,000 - $10,000 | 3 months | 12 months | 3 years |
|---|---|---|---|
| 19/7/14 | 2.50% p.a. | 3.30% p.a. | 3.70% p.a. |
| Current rates | 3.25% | 4% | 3.6% |
See past CommBank's Term Deposit rates and the current rates.
| Amount $10,000 - $49,999 | 2 months | 12 months | 5 years |
|---|---|---|---|
| 15/12/12 | 4.20% p.a. | 4.25% p.a. | 4.50% p.a. |
| 22/5/2013 | 3.90% p.a. | 3.95% p.a. | 4.50% p.a. |
| Current rates | 1.45% | 4% | 3.55% |
Overall, rates have fallen significantly since 1985, and are at record low levels today.
| Year | January | July |
|---|---|---|
| 1985 | 11.95% p.a. | 12.50% p.a. |
| 1990 | 14.90% p.a. | 13.95% p.a. |
| 1995 | 8.50% p.a. | 7.00% p.a. |
| 2000 | 5.45% p.a. | 5.85% p.a. |
| 2005 | 4.65% p.a. | 4.75% p.a. |
| 2010 | 5.95% p.a. | 6.00% p.a. |
| 2011 | 6.15% p.a. | 6.00% p.a. |
| 2012 | 5.00% p.a. | 4.40% p.a. |
| 2013 | 4.15% p.a. | 3.70% p.a. |
| 2014 | 3.35% p.a. | 3.30% p.a. |
| 2015 | 3.05% p.a. | 2.40% p.a. |
| 2016 | 2.45% p.a. | 2.35% p.a. |
Yes, rates on term deposits are nothing like they used to be. However, term deposits are still one of the safest, low-risk ways to invest your cash when you're not using it.
Interest rates usually follow a similar pattern to the Cash Rate, determined by the Reserve Bank of Australia on the first Tuesday of every month (except for January). When the cash rate is low, it's cheaper for the banks to borrow from the Reserve Bank of Australia. Therefore, banks don't have an incentive to offer savers a high interest rate, because it's easier for them to source their funds from the Reserve Bank of Australia.
Also, when the Cash rate is low banks also have lower home loan rates, meaning they're making less money from interest repayments on mortgages. With less money coming in from mortgages, there's less money to pay out on things like term deposits and savings accounts.
A low cash rate usually means that loan interest rates are lower than usual. So now could be a good time to refinance your home loan.
No, the Cash Rate is reflective of the state of the economy. For example, a low cash rate signals a slow economy, as the Reserve Bank is trying to encourage businesses to borrow funds for investment, which in turn will theoretically expand the economy. As the economy slowly regains its pace, the cash rate will rise as a result, and in effect, so will term deposit interest rates (eventually). However, mortgage rates will rise before term deposit rates do.
Looking for something to do with your cash? You'll find better interest rates on high interest savings accounts, and don't need to lock your money away for a set period of time. Or, if you are looking for a long-term growth you could consider investing in shares, investing in an index fund or topping up your super fund.
Compare term deposit rates from Australia's Big Four banks and see if you can find a better rate with a smaller bank.
Lock in a fixed rate on a range of term lengths between 3 months and 3 years for deposits $1000 or more.
Australian Unity Term Deposit offers you a wide choice of term lengths for your investment, with a fixed rate of return on your money.
Earn a competitive fixed interest rate on Citibank term deposit when you invest $10,000 or more.
Earn a competitive interest rate on terms between 1 month and 2 years with a Heartland Bank term deposit.
They offer a fixed interest rate (so you don't need to worry about any market volatility) and your deposit up to $250,000 is protected by the government.
A 5-year term deposit combines competitive fixed interest rates with the security of guaranteed returns.
Set your own terms and conditions for how your money grows with a flexible investment account that rewards you with higher interest earnings.
If you need a safe place to tuck your savings of away and yield a profit, a $100,000 term deposit could provide a solution.