The Current Term Deposit Environment: Highest, Lowest & Average Rates

Co-author: Will Jolly

What does the current term deposit environment look like, and how much has it changed? Canstar has analysed 1,100 unique interest rates for term deposits from 75 banking institutions to find the highest, lowest, and average rates on offer.

Term deposit rate movements

The official cash rate is currently sitting at a historic low of 1.50%, with March marking the 17th meeting in a row that the Reserve Bank of Australia has held the cash rate at this level. The last 25-basis point rate cut occurred back in August 2016

Despite no cash rate movement in this time, Canstar has seen movements to a range of term deposit rates from many different lenders. In February alone, 7 different institutions lowered rates on 1-year term deposits. Out of these rate decreases, the average cut was 13 basis points (0.13%).

Most financial commentators and economists predict that the next cash rate movement from the RBA will be an increase, but many of these experts don’t expect rates to rise until late 2018 or well into 2019, depending on who’s talking.

Keep in mind that some savings accounts are offering up to 3.05%p.a. at the moment, but be sure to check the conditional requirements.

What are current term deposit interest rates?

At the time of our latest update (March 5, 2018), the minimum, maximum, and average term deposit rates on Canstar’s term deposits database are as follows:

Current term deposit rates – Min, Max, and Average
Term Min  Max  Average
30d          0.85%           2.10%            1.58%
60d          1.25%           2.10%            1.66%
90d          1.50%           2.70%            2.12%
180d          1.69%           2.65%            2.24%
270d          1.39%           2.70%            2.09%
1 Year          1.55%           2.75%            2.35%
2 Year          1.50%           2.90%            2.51%
3 Year          1.50%           3.00%            2.61%
4 Year          1.50%           3.10%            2.65%
5 Year          1.50%           3.20%            2.73%

Source: www.canstar.com.au

Based on term deposit rates on the Canstar database and an investment amount of $25,000. Rates current as at March 5, 2018.

As you can see from the table above, although the term deposit rates are generally quite low at present, there is still a significant difference between the minimum and maximum rates on offer, so it’s definitely worth comparing your term deposit options.

* The examples provided above are not based on actual products. Prospective investors should make their own calculations based on specific product features and their own circumstances.

Some of the highest term deposit rates on Canstar’s database

The following table displays a snapshot of term deposits with a term range between 12-24 months with interest paid as specified in the table below. The results shown are based on an investment of $100,000 in a personal term deposit and are sorted by the highest advertised interest rate for a 12-month term, and finally by lowest payment frequency. For more information and to confirm whether a particular product will be suitable for you, check upfront with your provider and read the Product Disclosure Statement before making a decision. 

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