Savers and self-funded retirees take on term deposit rate changes from Commonwealth Bank

Australia’s largest bank has reduced a number of its short-term term deposit interest rates, but customers who are willing to lock their money away for a while longer could benefit from an increase to its 11 month rate.
Commonwealth Bank term deposit cut May 2020
Commonwealth Bank has reduced its term deposit interest rates. Image source: Nils Versemann, Shutterstock.

Commonwealth Bank made cuts of up to 0.20 percentage points to a range of smaller terms, effective today, but its 11-month deposit rate escaped the cuts and instead grew by 0.05 percentage points for balances over $5,000.

Some of the bank’s new term deposit rates, for balances of between $50,000 and $1,999,999, include the following:

  • 0.75%: 3 month term deposit, reduced by 0.10 percentage points
  • 0.70%: 4-5 month term deposit, reduced by 0.20 percentage points
  • 0.80%: 6-7 month term deposit, reduced by 0.10 percentage points
  • 0.85%: 9 month term deposit, reduced by 0.05 percentage points
  • 0.95%: 11 month term deposit, increased by 0.05 percentage points

Canstar finance expert Steve Mickenbecker said CBA’s reductions to term deposit rates continued the long downward grind of rate decreases for savers and self-funded retirees.

“The 1.70% and 1.75% rates introduced by the big banks in the first shock of COVID-19 are now but a memory and 1.10% and 1.35% are the new top rates you can expect from the big banks,” Mr Mickenbecker said.

“There are still rates up towards 2% on Canstar’s database, so it is worth the hunt to keep your savings working.”

Some of the higher term deposit rates on offer from smaller institutions at the time of writing include Qudos Bank’s 6-month term deposit available at 1.90% and firstmac’s 1.95% 12-month term deposit, according to Canstar’s term deposit database, for balances of $10,000.

The database shows that out of the four major banks’ highest term deposit rates for balances of $10,000, National Australia Bank comes out on top with a rate of 1.35% available on its 12 month term, followed by ANZ’s 1.15% for 8 months, CBA’s 1.10% for 8 months and Westpac’s 1.10% for 12 months.

All of Commonwealth Bank’s new term deposit rates

The below table displays the changes to CBA’s term deposits, effective from Monday, 18 May:

CBA Term Deposit Changes – 18 May 2020
For $50,000 to $1,999,999 deposits
Term Deposit Products Current Rates New Rate Change
1 month 0.25% 0.20% -0.05%
2 months 0.40% 0.30% -0.10%
3 months 0.85% 0.75% -0.10%
4-5 months 0.90% 0.70% -0.20%
6-7 months 0.90% 0.80% -0.10%
9 months 0.90% 0.85% -0.05%
11 months 0.90% 0.95% +0.05%
For $5,000 to $49,999 deposits
Term Deposit Products Current Rates New Rate Change
1 month 0.25% 0.20% -0.05%
2 months 0.30% 0.25% -0.05%
3 months 0.75% 0.65% -0.10%
4-5 months 0.80% 0.60% -0.20%
6-7 months 0.80% 0.70% -0.10%
9 months 0.80% 0.75% -0.05%
11 months 0.80% 0.85% +0.05%
For balances below $5,000 deposits
Term Deposit Products Current Rates New Rate Change
1-2 months 0.25% 0.20% -0.05%
3-7 months 0.70% 0.50% -0.20%
8 months – 5 years 0.70% 0.60% -0.10%
Source: canstar.com.au, 18 May 2020. Rates displayed are from Commonwealth Bank.

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