RaboDirect outs ASB’s 90-day leadership
The week past saw competition getting fierce in the short-term deposit space as rates got more attractive in the 90-day and six-month terms.
Monday, November 22nd 2010, 6:23AM
by Sophia Rodrigues
At the beginning of last week ASB was the leader among major banks in the 90- term offering rate of 5%. However, it was soon followed by RaboDirect which raised its 90-day deposit rate by 55 basis points to now offer 5%. In fact, RaboDirect could now be regarded as the leader as the bank offers the 5% rate for deposits as low as $1,000 whereas ASB's rate is only applicable for minimum deposit of $10,000.
Kiwibank made an unusual move, improving its six-month deposit rate by five basis points when it was already in a leadership position for that term. The recent hike comes on top of the huge 65 basis points increase it made the week before, and the bank is now offering the best rate of 5.20% for that term.
An investor seeking to invest in one of the major banks and for a term up to one year can now invest with RaboDirect for 90 days at 5% if there's just $1,000 to invest. ASB is offering the same rate but require minimum $10,000. For a five-month term, there's Bank of New Zealand offering 5.20% for a minimum amount of $10,000 and for six months it is Kiwibank offering 5.20% for an amount over $5,000.
In the nine-month term, we have BNZ again offering 5.30% for minimum $10,000 and finally for one-year RaboDirect is offering 5.30% for a minimum deposit of $1,000. Kiwibank is also offering the same rate but for a minimum deposit of $5,000 while ASB's minimum amount is $10,000.
Among other institutions, Nelson Building Society raised 90-day term rate by 90 basis points to match ASB and RaboDirect 5% rate. The minimum amount is $5,000. Nelson also raised six and nine-month deposit rates, and at 5.35% for nine months, it is attempting to topple BNZ's 5.30% rate.
See how ASB rates against RaboDirect here
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