Higher deposit rates at Kiwibank

Kiwibank has raised three, four and five year term deposit rates by 25 to 50 basis points (bps), lifting them beyond rates offered by the Australian-owned banks.

Over the last couple of weeks the banks have focused competitive moves around the four to nine month term deposit market and this latest move may spark a new focus around longer term rates.

Term deposit rates are generally on the rise here after the Reserve Bank told the banks they needed more funding from local depositors. Kiwibank generally funds itself locally, while the Australian-owned banks are trying to lower their dependencies on short term foreign funding.

For a minimum deposit of NZ$5,000, Kiwibank raised its three year term deposit rate by 25 bps to 5.50 per cent; its four year rate by 50 bps to 6 per cent; and five year by 50 bps to 6.50 per cent. All three new rates are now the highest offered by a bank for their respective terms.

Raboplus is offering 5.45 per cent for a three year term deposit and 6 per cent for a four year deposit. Rabo is also offering 6.3 per cent for five years, while HSBC is offering 6.4 per cent for a five year deposit over NZ$100,000.

Last week Kiwibank raised its longer term mortgage rates along with the other banks, with its new five year mortgage rate at 8.3 per cent.

- INTEREST.CO.NZ