Banks play cat and mouse over deposit rates
The big news in the finance company sector last week was the collapse of Capital + Merchant, but that hasn't slowed down competition between remaining players.
Tuesday, December 4th 2007, 5:08AM
An on-going battle is amongst banks for one-year money. Over the past week we have seen a couple of twists to the tale. KiwiBank, did a U-turn and put its one-year interest at maturity (IAM) special back up to 9.00%.
It was at this rate a fortnight ago, but dropped it back to 10 points last week and has now increased it again.
Meanwhile, Westpac has decided to offer its own twist. It has dropped its 12-month rate 20 points to 8.50%, but has introduced a 15-month rate of 9.00% (IAM) as an alternative. For shorter investment terms we have seen a number or competitive challenges.
The most fascinating is Marac coming out with a 90-day rate of 9.00%, and a 12-month rate of 9.75%. These appear to be designed to take on the banks.
Both rates are IAM (if you want a one-year investment with quarterly interest payment the rate drops from 9.75% to 9.30%).
ANZ appears to have switched its attention to terms of less than 12-months and has increased its six-month rate 50 points to 8.50%.
Likwise BNZ pushed up its six and nine month rates along with its 12-month ones.
Rabobank, made increases to many rates, although not its 12-month one, and this week has launched the first cash PIE.
Finance companies, besides Marac, were relatively quiet in the past week, with ANZ-owned UDC increasing its telephone call accounts and FMG pushing up quite a few of its rates, including its longer term ones, by 80 basis points each.
The other notable event was St Laurence adding a 16-month rate of 9.95% and 10.10% for amounts of up to $49,999 and 0ver $50k respectively.
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