Term deposits

[Julia]

Keep asking whatever you need to, new order. Apologies if I've created an impression you should have understood how the interest rate stuff works.

 

[Garpal Gumnut]

As interest rates look set to increase in to 2023 I thought I should resurrect this thread.

I have been in to Canstar, Google and a few other sites but it is all in flux atm.

I would be interested ( inside joke ) in ASF members experience recently with putting lazy money in to interest bearing deposit accounts with Australian based banks.

As you can see as of yesterday it is not a simple task to find the best rate, for the amount one wishes to deposit for the time one wishes to be separated from one's moolah without penalty.

Compare High Interest Savings Accounts | Canstar

Compare High Interest Savings Accounts from over 60 providers. Review account interest rates, account fees & more side by side. Compare now.

www.canstar.com.au

Their most recent update.

Which banks have increased their savings rates?​

We’ll be updating this article as changes come through from the major banks and other institutions.

ANZ​

Following the RBA’s November cash rate call, ANZ will increase the rate on the ANZ Plus Save account by 0.25%pa to 3.50%pa for balances less than $250,000, effective from November 10 2022.

Bankwest​

BankWest has announced changes to some of its savings and deposit products, as follows:

• BankWest’s Variable Rate Hero Bonus Rate will increase by 0.50% to 3.25% p.a. for balances up to $250,000, effective 11 November 2022.
• BankWest’s Easy Saver Rate will increase by 0.50% to 2.85% p.a. for balances up to $50,000, effective 11 November 2022.
• BankWest’s 12-month term deposit rate will increase t0 4.10% p.a., effective 4 November 2022.

Bank of Melbourne​

Bank of Melbourne has announced changes to some of its savings and deposit products, as follows:

• Bank of Melbourne’s Incentive Saver total variable rate with bonus interest will increase by 0.85% to 4.00% p.a., effective 9 November 2022.
• Bank of Melbourne’s Maxi Saver total variable rate will increase by 0.85% to 4.00% p.a. for new customers for the first three months, effective 9 November 2022.
• Customers will be able to access a new term deposit offer of 4.00% p.a. for 12 to 23 months, effective 4 November 2022.

BankSA​

BankSA has announced changes to some of its savings and deposit products, as follows:

• BankSA’s Incentive Saver total variable rate with bonus interest will increase by 0.85% to 4.00% p.a., effective 9 November 2022.
• BankSA’s Maxi Saver total variable rate will increase by 0.85% to 4.00% p.a. for new customers for the first three months, effective 9 November 2022.
• Customers will be able to access a new term deposit offer of 4.00% p.a. for 12 to 23 months, effective 4 November 2022.

CommBank​

CommBank has announced changes to some of its savings and deposit products, as follows:

• CommBank’s NetBank Saver standard variable interest rate will increase by 0.25% p.a. to 1.35% p.a. The five-month introductory variable rate will increase by 0.50% p.a. to 3.50% p.a., effective 11 November 2022.
• CommBank’s GoalSaver with bonus interest rate will increase by 0.30% p.a. to 2.70% p.a., effective 11 November 2022.
• Youthsaver with bonus interest rate will increase by 0.30% p.a. to 2.90% p.a., effective 11 November 2022.
• Some of CommBank’s term deposit interest rates will also be increased, including its 12-month term deposit which will be raised by 0.40% to 3.75% p.a. Its 18-month term deposit special will increase to 4.00% p.a. These new term deposit rates will be effective from 7 November 2022.

Macquarie Bank​

Macquarie Bank announced it will increase interest rates across a range of deposit products by 0.25% p.a. The increases to savings rates include:

• Macquarie’s savings account welcome rate, which will increase 0.25% to 4.25% p.a. for new customers, for the first four months on balances up to $250,000, effective 3 November 2022.
• The ongoing interest rate on savings and everyday transaction accounts will increase 0.25% to 3.45% p.a., on balances up to $250,000, effective 16 November 2022.

St. George​

St. George Bank has announced changes to some of its savings and deposit products, as follows:

• St. George’s Incentive Saver total variable rate with bonus interest will increase by 0.85% to 4.00% p.a., effective 9 November 2022.
• St. George’s Maxi Saver total variable rate will increase by 0.85% to 4.00% p.a. for new customers for the first three months, effective 9 November 2022.
• Customers will be able to access a new term deposit offer of 4.00% p.a. for 12 to 23 months, effective 4 November 2022.

ubank​

NAB subsidiary ubank has announced that it will pass on the RBA’s latest interest rate rise to its savings customers, effective December 1 2022. The provider says that its savings rate will be increased from 3.60% p.a. to 3.85% p.a — a base rate of 0.10% and a bonus rate of 3.75%.

Westpac​

The major bank announced the following deposit rate changes, which will be effective from 9 November 2022, unless otherwise indicated:

• Westpac Life total variable rate with bonus interest will increase by 0.90% p.a. to 3.50% p.a.
• Westpac eSaver total variable rate will increase by 0.95% p.a. to 3.50% p.a. for new customers for the first five months.
• Customers will be able to access a new term deposit offer of 3.75% p.a. for 12 to 23 months, effective 4 November 2022.

gg

 

[Dona Ferentes]

TDs are fine, as they fall in the $250K guarantee, but the money gets locked away .. and what is your view on interest rates going forward? If the RBA keeps raising (to contain inflation) then locking in to a TD will bring lower returns, whereas if the cycle is close to peaking, then a TD may be beneficial.

A lot of it depends where, what and how you want to sit on the Risk / reward / Timeline profile.. In interest-rate land when looking for income but not capital gains, there can be three forms of return, Fixed rate, Floating rate and Inflation linked. And, as per the first point, there are trade-offs

That's the more arcane overview; more simply it can be put like this:


...but as an aside, there was an article recently that said ASX listed Hybrids (Capital Notes) are offering higher returns than shares, in the current market. Recently:

CBA is raising $750 million of hybrid capital to strengthen its balance sheet with a capital note called PERLS XV that will have a floating yield of around 5.84 per cent and matures in 2031. NAB Capital Notes 3 is offering 7.19 per cent yield to maturity and Macquarie Bank Capital Notes 2 has a 7.07 per cent yield to maturity.

Or you can go through an ETF, get diversification but give up 0.35% in MER, and buy a Capital Note ETF.

And, at present, the wacky world of T2 subordinated debt is actually offering better returns than T1 Hybrids. ... here is a link:

Less risk, similar returns - Tier 2 OTC bonds better value than listed Tier 1 hybrids

OTC Tier 2 notes offer better value compared to Tier 1 listed hybrids.

thewire.fiig.com.au

Disc: As a soph, I have an OTC bond allocation through FIIG. I lose 0.20%pa in management fees from the stated return but hold a bunch of Inflation linked bonds. Directly.

 

[againsthegrain]

I got my money spread through 6 different banks in various savers. My best one is with st George at 3.15% worst one with Anz at 2%
By doing this I have the 250k guarantee, also different banks and saver accounts might have different increases in the future.

I don't think there is a point at locking in a rate, things will be fluid for a while.

Cleaned up 1k in interest last month, things are starting to look decent... as long as u forget inflation is most likely double digit ?

 

[Value Collector]

I got my money spread through 6 different banks in various savers. My best one is with st George at 3.15% worst one with Anz at 2%
By doing this I have the 250k guarantee, also different banks and saver accounts might have different increases in the future.

I don't think there is a point at locking in a rate, things will be fluid for a while.

Cleaned up 1k in interest last month, things are starting to look decent... as long as u forget inflation is most likely double digit ?

Have you taken a look at Plenti.

Minimum deposit is only $10, it might be worth having a look at it, even if it’s just with a little bit of play money at first

 

[againsthegrain]

Have you taken a look at Plenti.

Minimum deposit is only $10, it might be worth having a look at it, even if it’s just with a little bit of play money at first

Actually you recommend it to me a good year+ ago and I have been sitting on the fence about it since then 4.8% currently I Just checked it sure does sound very sweet.

Have you ever had anybody default on their loan?

 

[InsvestoBoy]

I got my money spread through 6 different banks in various savers. My best one is with st George at 3.15% worst one with Anz at 2%
By doing this I have the 250k guarantee, also different banks and saver accounts might have different increases in the future.

I don't think there is a point at locking in a rate, things will be fluid for a while.

Cleaned up 1k in interest last month, things are starting to look decent... as long as u forget inflation is most likely double digit ?

Given the shape of the government bond yield curve, you can get similar or better rates from the ASX listed bond CDIs if you don't want to have to spread your money across banks trying to keep the guarantee (government bonds are similarly guaranteed but you can buy as many as you like).

The lowest duration bond on the curve is yield-to-maturity 3.2%.

Bonds - prices

Invest in a range of tradeable government bonds and corporate bonds. Get the latest prices for exchange-traded treasury bonds, exchange-traded treasury indexed bonds, corporate fixed bonds and corporate floating bonds.

www2.asx.com.au

 

[InsvestoBoy]

Even inflation linked bonds are now offering a real return for the first time in ages.

iShares Government Inflation ETF | ILB

The fund aims to provide investors with the performance of the Bloomberg AusBond Inflation Government 0+ Yr IndexSM, before fees and expenses. The index is designed to measure the performance of a segment of the Australian bond market comprised of inflation-linked fixed income securities.

www.blackrock.com

This real yield was above 1% quite recently.

 

[InsvestoBoy]

Disc: As a soph, I have an OTC bond allocation through FIIG. I lose 0.20%pa in management fees from the stated return but hold a bunch of Inflation linked bonds. Directly.

Did you know about Government bond CDIs? You can buy the inflation linked bonds, directly, yourself, with no 0.2%pa fee (although there is a spread from the market maker).

Click "Exchange-traded Treasury Indexed Bonds"

Bonds - prices

Invest in a range of tradeable government bonds and corporate bonds. Get the latest prices for exchange-traded treasury bonds, exchange-traded treasury indexed bonds, corporate fixed bonds and corporate floating bonds.

www2.asx.com.au

 

[qldfrog]

Did you know about Government bond CDIs? You can buy the inflation linked bonds, directly, yourself, with no 0.2%pa fee (although there is a spread from the market maker).

Click "Exchange-traded Treasury Indexed Bonds"

Bonds - prices

Invest in a range of tradeable government bonds and corporate bonds. Get the latest prices for exchange-traded treasury bonds, exchange-traded treasury indexed bonds, corporate fixed bonds and corporate floating bonds.

www2.asx.com.au

I have had them for ages just buy on market with usual broker fees.
As inflation popped up, i closed the fixed rate ones and kept the inflation linked ones.
It is not perfect: as all bonds, these got smashed on the way down in recent years but regular distribution and as safe as can be ,with full availability/flexibility so i kept these more than TD.

 

[Value Collector]

Actually you recommend it to me a good year+ ago and I have been sitting on the fence about it since then 4.8% currently I Just checked it sure does sound very sweet.

Have you ever had anybody default on their loan?

The longer term loans are at about 6%, also the pay monthly principle an interest payments, so you don’t have to wait the full term to get all your capital back, some loans also get paid off early.

 

[bluekelah]

I don't do term deposits but my everyday savings account with ING Bank is now doing 4.05% interest pa, calculated daily,paid monthly, and with some other small restrictions like having to end the month with higher amount than month before (not an issue just top up a few bucks end of the month) and using their debit card for groceries. It was just at 3 percent last month or so. Dang rates going up quick.

 

[divs4ever]

TDs are fine, as they fall in the $250K guarantee, but the money gets locked away .. and what is your view on interest rates going forward? If the RBA keeps raising (to contain inflation) then locking in to a TD will bring lower returns, whereas if the cycle is close to peaking, then a TD may be beneficial.

A lot of it depends where, what and how you want to sit on the Risk / reward / Timeline profile.. In interest-rate land when looking for income but not capital gains, there can be three forms of return, Fixed rate, Floating rate and Inflation linked. And, as per the first point, there are trade-offs
View attachment 148800
That's the more arcane overview; more simply it can be put like this:
View attachment 148799

...but as an aside, there was an article recently that said ASX listed Hybrids (Capital Notes) are offering higher returns than shares, in the current market. Recently:

Or you can go through an ETF, get diversification but give up 0.35% in MER, and buy a Capital Note ETF.

And, at present, the wacky world of T2 subordinated debt is actually offering better returns than T1 Hybrids. ... here is a link:

Less risk, similar returns - Tier 2 OTC bonds better value than listed Tier 1 hybrids

OTC Tier 2 notes offer better value compared to Tier 1 listed hybrids.

thewire.fiig.com.au

Disc: As a soph, I have an OTC bond allocation through FIIG. I lose 0.20%pa in management fees from the stated return but hold a bunch of Inflation linked bonds. Directly.

a fair bit of book-work ( learning about the various bonds, hybrids and notes ) but CAN ( not always ) be a nice deal

a small gotchya in 'inflation adjusted ' is a lagging rise

the official sources have to calculate the CPI ( previous increases ) first and THEN apply the new rate ... i mostly went for BBSW based calculations of interest , far from perfect but more agile and reflexive .

HOWEVER researching this area MIGHT be lucrative in an era of rising 'inflation'( interest rates )

if you have questions in this area .. a financial adviser is certainly a good place to ask ( don't forget your tax accountant for the tax implications , as well )

i tended to buy ( between 2011 and 2015 ) specific notes , bonds etc. because like ETFs you really need to get deep into the paper-work to get best out of these things

 

[divs4ever]

I got my money spread through 6 different banks in various savers. My best one is with st George at 3.15% worst one with Anz at 2%
By doing this I have the 250k guarantee, also different banks and saver accounts might have different increases in the future.

I don't think there is a point at locking in a rate, things will be fluid for a while.

Cleaned up 1k in interest last month, things are starting to look decent... as long as u forget inflation is most likely double digit ?

check which banks trade under which ADI , last i heard St. George trade under the WBC ADI so are classed as the same 'bank ' for the purposes of the deposit guarantee ( as an example )

sometimes losing less money/spending power than most is 'winning '

 

[againsthegrain]

check which banks trade under which ADI , last i heard St. George trade under the WBC ADI so are classed as the same 'bank ' for the purposes of the deposit guarantee ( as an example )

sometimes losing less money/spending power than most is 'winning '

I believe this is the list, I have researched it

List of authorised deposit-taking institutions covered under the Financial Claims Scheme | APRA

The authorised deposit-taking institutions (ADIs) listed at the bottom of this page are all covered under the Financial Claims Scheme (the FCS).

www.apra.gov.au

 

[divs4ever]

I believe this is the list, I have researched it

List of authorised deposit-taking institutions covered under the Financial Claims Scheme | APRA

The authorised deposit-taking institutions (ADIs) listed at the bottom of this page are all covered under the Financial Claims Scheme (the FCS).

www.apra.gov.au

yes it has changed in places since i last used term deposits ( the last few years i was doing better elsewhere , including shares in the bank themselves )

that does not mean i will not use them again sometime in the future

 

[againsthegrain]

yes it has changed in places since i last used term deposits ( the last few years i was doing better elsewhere , including shares in the bank themselves )

that does not mean i will not use them again sometime in the future

I guess that is diversification, bank interest is as safe as you get, I do also collect some dividents and have pm even got my ass kicked on a few specs.... im not really a adrenaline junky

 

[againsthegrain]

I just saw this advertised:
St.George Incentive Saver total variable rate with bonus interest will increase by 0.85% p.a. to 4.00% p.a., effective 9 November."

Things are still on the move and looks like will be for a while

 

[Belli]

I just saw this advertised:
St.George Incentive Saver total variable rate with bonus interest will increase by 0.85% p.a. to 4.00% p.a., effective 9 November."

Things are still on the move and looks like will be for a while

ING Direct. The current rate is before the recent RBA increase so it'll probably go up soon. Some additional benefits for Orange Card holders.

High Interest Savings Account. Savings Maximiser | ING

Savings Maximiser is our high interest savings account, offering a high variabe interest rate and no ING fees. Find out more.

www.ing.com.au

 

[divs4ever]

I guess that is diversification, bank interest is as safe as you get, I do also collect some dividents and have pm even got my ass kicked on a few specs.... im not really a adrenaline junky

i am ( was ?? ) an adrenaline junkie , but in the last 11 years i really NEEDED to tone that down ( most addictions you are never completely cured of , you might control it , more often resist it , but gone forever .. that isn't the norm )

specs are a percentage game ( imo ) you pick mostly duds , but the winners can be ten-baggers , twenty-baggers and a rare monster ( one-hundred-bagger plus )

one ten-bagger neutralizes ten absolute busts ( when you crystallize the gains )

or course some can pick on ten-bagger in every 4 speccies ( that ain't me )

the Cyprus ( and Greece ) saga rattled my faith in Sovereign debt and government guarantees , and several changes later ( like 'bail-in' laws ) haven't restored that faith

and you certainly need higher TD rates than currently offered to lure me back into any meaningful position into that area ( compared to selected corporate debt )