Westpac the last big bank to rule out prospect of further RBA cuts, as term deposits climb
18 Dec 2025
Westpac has today updated its cash rate forecast, predicting the RBA will keep the cash rate on hold at 3.60 per cent for the foreseeable future.
Previously Westpac’s economic team was predicting two further cash rate cuts in May and August next year. However, the bank is leaving the door open to this possibility in the first half of 2027.
The shift comes on the back of recent inflation surprises and the RBA’s more hawkish tone.
This follows on from yesterday’s cash rate revisions from CBA and NAB, both of which are now predicting a cash rate hike, potentially as early as February.
ANZ still expects the cash rate to remain unchanged in 2026.
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| Current big four bank cash rate forecasts | ||
|---|---|---|
| Bank | Next move | Cash rate at end of 2026 |
| CBA | 1 hike in Feb | 3.85% |
| Westpac | None | 3.60% |
| NAB | 2 hikes in Feb, then May | 4.10% |
| ANZ | None | 3.60% |
Term deposit rates continue to rise on changing forecasts
The Canstar database shows 33 banks have hiked at least one term deposit rate so far this month. This list includes CBA, NAB, ANZ and Westpac, which changed its term deposit special from 3.90% for 11 months to 4.10% for 12 months.
This compares to just 10 banks that cut at least one term deposit rate so far this month.
Source: Canstar. Notes: based on balances of $50k.
As a result, out of the big four banks, ANZ has the highest term deposit rate of 4.25%, although it’s only for a term of 8 months. CBA has a 2-year term at 4.20%, while Westpac and NAB are now offering 4.10% for a term of 12 months.
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| Highest term deposit rates from the big four banks | ||
|---|---|---|
| Rate | Term | |
| CBA | 4.20% | 2-year |
| Westpac | 4.10% | 12-month |
| NAB | 4.10% | 12-month |
| ANZ | 4.25% | 8-month |
Source: Canstar.
Despite the hikes, three of the big banks still don’t feature among the list of lenders offering the highest term deposit rates.
CBA does, however, with the highest 2-year term deposit rate on the Canstar database.
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| Highest term deposit rates on Canstar | ||
|---|---|---|
| Term | Bank | Rate |
| 6-month | Australian Military Bank, G&C Mutual Bank, Heartland, Unity Bank | 4.40% |
| 1-year | G&C Mutual Bank, Unity Bank | 4.50% |
| 2-year | CBA, Bank Australia, Qudos Bank | 4.20% |
| 3-year | Bank Australia, Qudos Bank | 4.20% |
Source: Canstar.
Central bank puts borrowers on notice
Canstar’s data insights director, Sally Tindall says, “Westpac’s the last big bank to rule out the possibility of further cash rate cuts on the back of what has been a marked shift in tone from the RBA.
“The central bank has gone out of its way to put borrowers on notice that cash rate cuts are well and truly out the window, but also, hikes are now back on the table.
“While this news is a bitter pill to swallow for borrowers lugging around Santa sacks full of debt, anyone with money in the bank could start to feel a tailwind instead of a headwind in 2026 if the cash rate starts to rise.
“Certainly term deposit rates are already on the move. In the last two weeks, all four big banks have increased at least one term deposit rate, with ANZ taking the lead, among the majors, with an eight month rate of 4.25 per cent.
“The leading term deposit rate on Canstar right now is a healthy 4.50 per cent, however, this could move higher in the weeks and months ahead, particularly if the RBA starts hiking in the new year.
”Term deposits are often an early indicator of changing rate expectations. The fact banks started lifting rates weeks ago suggests they had already begun preparing for a different rate path.”
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
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