# Term deposit % rates



## CamKawa (18 July 2008)

Does anyone know what determines the banks daily interest rate for term deposits? Is it the 90 day bank bill? The reason I'm asking is because when I get a quote it differs every day. I'd like to know what indicator to look at and when it's up call the bank then. Thanks.


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## Julia (18 July 2008)

Have you asked the banks this question?
As far as I know individual banks just set their rates.  ANZ re-issues their TD rate sheet every Friday.  Sometimes the rates change and sometimes not.
I'm surprised to hear of your getting different quotes every day.  With whom?


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## CamKawa (18 July 2008)

If you have a couple of dollars you can go into the bank and negotiate the rate with them. That rate changes daily and I'm wondering what determines that. I haven't asked the teller at the bank what determines their daily rate as I'm not sure they'd know.


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## pepperoni (18 July 2008)

CamKawa said:


> If you have a couple of dollars you can go into the bank and negotiate the rate with them. That rate changes daily and I'm wondering what determines that. I haven't asked the teller at the bank what determines their daily rate as I'm not sure they'd know.




I have private banking with CBA and Im *told* its just the cost of money in the market so yes 90 day bank bill is as good as any.

CBA claim cost of money is down from 3 months ago ... offereng me 7.65 today but 8% 3 months ago.  

So they have upped their rated by .15 but are offering me .35 ... gotta love banks.  I think the .15 is purely to preserve their profitability.

Still an absurdly good return for cash.  Alot of people becoming non resident and investing in singapore in aussie dollars tax free I think ... but ill bet the rate over there is only 4% anyway.

Citi and st george have 8% and 7.5% at call which is the best deal.  CBA private bank even offers only 7.1% at call!

For a minimum 100k you can also go TCD or CD if you dont mind a little risk 8.6% for 12 months and 8% for 1 month respectively.  I got this info today but not my thing ...

"As discussed, I have attached further information on the investment options (that is, Transferable Certificate of Deposit (TCD) and Commercial Paper (CP)) for your reference. My apologies, but the Commercial Paper is not guaranteed by the Commonwealth Bank-I got this confused with the TCD. TCD may not be an option due to the timeframe of the investment-being a year minimum.

Commercial Paper is in some ways similar to a bank bill. The fundamental difference to a bill, is that CP does not have an acceptor. The main issuers of CP are non bank financial institutions and large corporations with high credit ratings. In order for these issuers to gain a rating of A1+ for example they need to satisfy certain requirements one been they must have liquidity provision accessibility from A1+ rated banks. Common names that we trade include Waratah, Perryant, Spinnaker and Polar. I have included below some information on each

Polar Finance Limited - As Polar is a $1 billion Commercial Paper programme managed by Macquarie Bank. It is one of not the most common CP that the we trade. 

Spinnaker Capital Pty Ltd - is an Australian domiciled asset-back commercial paper program. Along with Polar it is one of the more common names we trade at the CBA. The program is managed by State Street Capital Pty Limited. 

Perry Antipodes Trust No.1 - is a $1.5 billion asset-backed CP program. The liquidity provider is the Sydney Branch of Bank of America. Has been popular with our customers as has been paying higher rates than other corporates but has recently brought rates back into line with the rest of the market.

Waratah Receivables Corporation Pty Limited - is a Commercial Paper program sponsored by Westpac. I have included the latest investor report put out by Waratah. Like Perry's it has recently been popular with clients due to paying higher rates than other corporates, but it has also brought rates back into line with the rest of the market

The Perry Antipodes and the Waratah reports are as little dated, apologies. I will  see if we have an updated version and can send this through if you are still interested. "


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## pepperoni (18 July 2008)

Update on 1 month compounding at maturity ... Im going shorter term in case a reasonably priced property pops up soon 

"The rate we have is 7.40% pa (has increased since by 7.35% pa quote to you earlier on the phone), this rate is only available on our Cash Deposit Account (CDA)-term deposit. So we will have to roll your maturing investment to a CDA 30 Day term deposit. The alternative, is 7.35% pa for a retail term deposit-that is to keep your existing term deposit account number."


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## CamKawa (18 July 2008)

pepperoni said:


> I have private banking with CBA and Im *told* its just the cost of money in the market so yes 90 day bank bill is as good as any.



Thanks



pepperoni said:


> Citi and st george have 8% and 7.5% at call which is the best deal. CBA private bank even offers only 7.1% at call!.



ANZ will offer 8% at call until 31st of Jan
http://www.anz.com/aus/promo/Hey-Big-Saver/default.asp
ANZ term deposit for 6 months is 8.15%, CBA is offering 8.0% for 6 months but with a bit of arm twisting I could get another .15%, that is with new money. NAB was able to match that rate and Westpac offered 8.05%

but the best I can find is 8.6% for 6 months
http://www.eldersruralbank.com.au/savings-and-investments/interest-rates
Apparently Elders Bank is on credit watch and may get down graded to BBB


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## mike85 (18 July 2008)

Bankwest has 8.5% for 7 months and 8.7% for 12 months...
http://www.bankwest.com.au/Rates/Term_Deposits/index.aspx
I think the bank is the safest place for my money at the moment


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## CamKawa (18 July 2008)

mike85 said:


> Bankwest has 8.5% for 7 months and 8.7% for 12 months...
> http://www.bankwest.com.au/Rates/Term_Deposits/index.aspx
> I think the bank is the safest place for my money at the moment



When you look at the stock market and property a term deposit looks good. 

Bankwest is owned by HBOS in the UK which has a bit of problem at the moment and is looking to sell Bankwest.
http://www.news.com.au/business/story/0,23636,24037833-462,00.html

The question I have is how safe are some of the banks? It seems to me the higher the % rate the shakier the bank. How secure credit unions are compared to banks I don't know either. I just phoned my credit union and they said they don't have a credit rating.


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## Naked shorts (18 July 2008)

mike85 said:


> Bankwest has 8.5% for 7 months and 8.7% for 12 months...
> http://www.bankwest.com.au/Rates/Term_Deposits/index.aspx
> I think the bank is the safest place for my money at the moment




I just applied for an ING direct account, are they still any good? 1 year deposit is 8.5% and the on call savings is 8% but that is only for a couple more months.


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## Nyden (18 July 2008)

Naked shorts said:


> I just applied for an ING direct account, are they still any good? 1 year deposit is 8.5% and the on call savings is 8% but that is only for a couple more months.




Well, I get 8.5 from bankwest telenet saver; which is on-call. Up to you really; some doomsayers would advise against bankwest ... not me, though :


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## gfresh (6 September 2008)

Looks like ING has extended the 8% rate on their at-call savings account by another month until October 31st.. Not bad, in a falling interest rate environment. 

Probably doesn't say much for the health of ING over in Europe  Does anybody know if their Australian business is separate to the Euro ones?

Can't remember a better time for cash hoarders


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## CamKawa (6 September 2008)

It's interesting to see what's going on. The at call rates haven fallen either very little or not at all compared to term deposit rates. I wonder why that is? AMP is also offering 8% at call.


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## CamKawa (6 September 2008)

gfresh said:


> Probably doesn't say much for the health of ING over in Europe  Does anybody know if their Australian business is separate to the Euro ones?



I dunno. I have the same question of Citi here. Phone them up and ask them I suppose.


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