Term Deposit Rates Australia

With rising interest rates and lower cash rates for time deposits in Australia the gap is narrowing. The Reserve Bank of Australia has announced the interest rate increase of three consecutive months in 2009. And we saw that the average rate of deposits with deposit term of three years has dropped to 6.01 in January 2010. This represents a decrease of the average rate of deposits from 6.22 percent in December 2009.


The rate of time deposits were originally abandoned by ANZ, one of the four major banks in Australia. And surprisingly the cut came after a month time deposit rates upward. Given the current scenario, the rate of term deposit for one year are about 1.44 per cent higher than the rate of interest. And it's a scenario that Australians can benefit.


While ANZ has dropped its rate, the three other major banks in Australia - Commonwealth Bank of Australia, Westpac Banking Group and National Australia Bank (NAB) have not reduced the rate of three-year term deposits since November 2009.


However, experts believe that this kind of gap between rates on deposits and interest rates are not likely to last long because it is a scenario that has not been observed many times. With a large gap between these rates, you can actually borrow at lower interest and make money by simply keeping the money in one of the safest investment possible.


It is literally a case of making hay while the sun shines! Because once the term deposit rate downwards, which is expected, the scenario will not be as comfortable as it seems now.