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Rates Update: F&P responds to PGG with sharp rate hikes

The week past saw some major rate changes in the non-bank deposit-taking space in what seemed to be a tussle between two equally rated finance companies.

Monday, February 7th 2011, 6:06PM

by Sophia Rodrigues

Fisher & Paykel made some big moves in interest rates as it raised rates across most terms up to five years. The move was likely in response to rate increases made by PGG Wrightson in early January and the overall higher rates it has been offering compared with F&P.

Both companies are BB rated which from an investor point of view means equal risk, though a savvy investor may find there could still be big differences in the risk profiles between the two companies.

F&P made a sharp 225-basis-point increase in 12-month guaranteed deposit rate to take it to 6.25% for a minimum amount of $1,000. This compares with 5.80% that PGG Wrightson is offering for a minimum amount of $500. PGG had made a similar big move for this term a month ago.

In case of non-guaranteed one-year deposits, F&P raised the rate by just 50 basis points to 7.25% which compares with 7.20% offered by PGG.

Probably the most attractive rate is the 6% offered by F&P on three-month non-guaranteed deposits which compares favourably with other finance companies and banks. Investors may note that the Treasury has made no provisions for default by finance companies under the extended guarantee scheme which indicates it sees remote chances of this occurring.

Surprisingly, last week PGG made downward moves in the 90-day space which makes F&P's rates all the more appealing.

Among banks, National Bank made a 50 basis point cut in the five-month deposit rate and an increase of 50 basis points in the six-month term. ANZ National's other brand ANZ, however, didn't make similar changes so we now have both the brands offering exactly opposite rates for the four and five-month terms.

In other rate changes, ASB lowered the six-month deposit rate by 10 basis points to 5%, after having raised it by a similar quantum just two weeks back.  RaboDirect continues to be leader there with 5.15%.

« RaboDirect lone active bank in quiet term marketRates Update: Rabo’s leadership remains unchallenged »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 ▲4.05 4.49
ANZ Special - 3.55 ▲3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank ▼5.20 ▲4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▲3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.39 3.45 3.89
Sovereign 5.30 ▼3.89 ▼4.05 ▼4.39
Sovereign Special - ▼3.39 ▼3.55 ▼3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.45 3.99
Median 5.34 3.99 4.07 4.39

Last updated: 9 December 2019 9:02am

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