Commbank drops term deposit rates after 2.7% inflation figure posted
%20(1).jpg)
After the RBA announced yet another hold in the cash rate on Tuesday, Commbank has cut most of its term deposit rates by 10-15 basis points from 4 months up to 5 years, while only increasing its 1-year rate by 35 basis points.
The country's biggest bank also removed 1-year and 2-year rates for its special term deposits while reducing the 9-month rate to 4.75% p.a.
Commbank term deposit changes:
|
Annual Term
|
Old Rate
|
New Rate
|
|
1 year
|
4.00% p.a.
|
4.35% p.a.
|
|
2 years
|
3.80% p.a.
|
3.70% p.a.
|
|
3 years
|
3.55% p.a.
|
3.45% p.a.
|
|
4 years
|
3.55% p.a.
|
3.45% p.a.
|
|
5 years
|
3.55% p.a.
|
3.45% p.a.
|
|
Special TD Term
|
Old Rate
|
New Rate
|
|
9 months
|
4.80% p.a.
|
4.75% p.a.
|
Commbank hasn’t been alone in this decision. Over the past few months, many providers have been cutting term deposit rates for longer terms while leaving 1 year (and often lower) rates at a more competitive level. Part of this has to do with expectations—most providers expect rate cuts either at the end of 2024 or sometime next year.
You can get a good look at how this works out by looking at the table below. Our team has crunched the numbers and averaged out the rates we track in the Mozo database.
|
Term Deposit Rate Averages
(All Personal TDs at $25,000*) |
|
|
Term Length
|
Rate (p.a.)
|
|
9 month
|
4.27%
|
|
1 year
|
4.47%
|
|
2 years
|
3.94%
|
|
3 years
|
3.76%
|
|
4 years
|
3.59%
|
|
5 years
|
3.61%
|
*as of 26 September 2024
Inflation figures point the way
These new rates come off the back of recent inflation figures from the Australian Bureau of Statistics showing a rise of only 2.7% in the 12 months to August compared to last month's 3.5%.
However, it should be noted that recent figures are likely influenced by government energy rebates so both the RBA and banks will be waiting to see how the quarterly CPI figures track alongside this.
See also: When will interest rates finally come down? for a breakdown of where the latest rate cut predictions stand.
Overall, term deposit rates are still sitting at a fairly good level for the moment. If you’re interested in signing up for a provider, you can check out our term deposit hub page and compare accounts today.