Despite The Reserve Bank of Australia (RBA) Keeping the Cash Rate at 3.85 % at its Last Meeting, Australian Banks Have Been Agressively Triming Term Deposit Rates in Recent Weeks.
Some Of Many One‑year Deposits that Were Offering 4-5% in early 2024 Have now dryed to the Mid 3% Range, With Short Terms Hit Even Harder.
Average yields across all terries in mozo’s database Have now Slipped below 4%, make it hard for saves to earn a recurn that keeps up with information:
Right Now, Inflation is 2.4%. That Means Prices Are Rising by 2.4% A Year. If your time deposit earns 3.8%, your reulfurn is only about 1.4% – and that’s before Tax. If your recurn is LOWER THAN Infield, Your Money is ACTULY LOSING VALUE In Real TERMS. So who you’re earning interest, it may not be engrave to Keep up with RISING COSTS.
In Short: With a many Term Deposit Rates Now Under 4%, it’s getting tougher for aussies to protect their savings, let Alone Grow them.
With at least one more RBA RATE CUT Expected in the Months AHEAD, IT APPEARS Banks Are Moving to Protect Their Margins – Regless of where the Cash Rate Stays on Hold for now.
What this means for save
| Situlation | Impact | What you can do |
|---|---|---|
| Locked-in Investors | If you liked in a Rate Above 5 % in 2023-24, you’re in a good place and shoulder enjoy the highurns while they last. | Let it ride and avoid Breaking the Term Early. |
| New Investors | The Highhest offers Across All Terms in Mozo’s Database Are Between 3.65 % – 4.45 %, with Top Rates Harder to Find. | Shop Around Quickly and Compare Across Banks. |
| Short Vs Long Term | Somesh the Flexibility Trade‑off isn as as STEEP. | Consider Laddering Deposits Across Multiple Terms. |
Smart Money Moves to Consider
- Lock in now if the raate is right. Term Deposit Rates May Continue to Fall Ahead of Expected RBA CUTS, so it couold Pay to act Sooner Ratter Than Later.
- Ladder Your Deposits. Spread Your Funds Across Direction Maurities to avoid reinvesting everything at OnCE when Rates May Be Lower.
- Look Beyond the Big Four. Many Smaller Banks and Mutuals are Still Offering More Competitive Rates Than The Majors.
- Explore Alternatives. With Term Deposits now delivering Lower yields, it might be work considering other Low‑risk inchesify Your recurns.
The High-Lield Term Deposit Environment is Fading Fast, and Saves May Need to Adjust Their Expectations. But there’s Still Value to Be Found, Especially for Those Willing to Compare Offers and Act Strategically. Locking in a deflent Rate Now, Spreading Deposits Across Terms, and Exploring Alternatives count help sound
