In response to the launch of ASB FastSaver account and current market conditions UDC is offering 6.20% for new telephone call accounts with balances of between $5000 and $99,999.
Its rate for more than $100,000 is 6.30% This matches ASB which is paying 6.20%. Superbank, the first to play in this space, is paying 6.55% on its Supersaver account.
These accounts are aimed at savers who use telephone and Internet banking.
Because these accounts have limited functionality their rates are higher than standard savings accounts.
However, they also compete against the more traditional term deposit savings vehicles.
Superbank chief operating officer James Munro says although ASB and UDC are competing in this market he doubts whether they are threats because it is still a relatively new market with plenty of growth opportunities.
He hopes that their entry into the “direct saver” arena will help “grow the whole space.”
His question is whether the other offers will be attractive as they are offering rates which are 30 basis points below the cash rate.
The drawback of the UDC offer is that it is only for new telephone call accounts.
“Due to system constraints we are unable to offer the special rate for existing call accounts,” UDC says.
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