Savers hoping for a significant rise in term deposit interest rates would be justified in feeling a bit miffed.
Savers hoping for a significant rise in term deposit interest rates would be justified in feeling a bit miffed by the increases made by the major banks since the Reserve Bank of Australia started lifting official rates in May.
Term deposits require you to lock up your money with a bank for a set period, and in return, the bank pays a fixed amount of interest. These rates reflect market bets on the outlook for official interest rates , rather that where rates are today. Murray says major banks have been paying interest rates of more than 4 per cent on one-year wholesale term deposits, whereas retail rates from the big four are about 3 per cent. While that gap has been narrowing lately, he says a 1 percentage point difference is “pretty insane.”
Big banks are paying about 3 per cent for a one-year term deposit to retail customers. But data from a platform called Imperium suggests sophisticated investors can get about 3.8 per cent for a one-year term deposit.
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