Over the last 12 months the average interest rate being paid on term deposits has fallen significantly. RFi Group data shows that between March 2016 and March 2017 the average term deposit interest rate fell from 3.36% to 2.87%, a drop of more than 0.5%. The low interest being earnt on term deposits is also believed to be the reason there has been a decrease in the proportion of savers using term deposits overall, with RFi Group data showing over the last 3 years the proportion of term deposit holders has fallen by 7%.
There has been a decrease in the proportion of savers using term deposits overall, with RFi Group data showing over the last 3 years the proportion of term deposit holders has fallen by 7%.
Although there have been significant decreases in the interest earnt on term deposits, Peter Marshall, Product Data Manager at Mozo, believes if savers are savvy they can still earn more than 3.00% interest on their term deposit. Marshall explains, “Despite the fact that we’re seeing term deposit rates trending down overall, savers do have the opportunity to nab tempting rates from non-major banks and credit unions up to 3.20% for a two-year rate.” To get better interest rates on term deposits savers are being encouraged to consider banks outside the Big 4. For example, savers can earn 3.20% on a 2-year term deposit through Maitland Mutual Building Society, which is 0.6% higher than the interest rate being offered by both ANZ and NAB for a term deposit of the same tenure.
Source: RFi Group Australian Savings and Deposits Council