AMP Bank has moved to turn around a recent deposit outflow, increasing term deposit rates by as much as 35 basis points last month. Its offer of 80 bps for 11 months is the highest rate available for a term under 12 months.
According to the latest Mozo Banking Roundup, AMP Bank’s rate increases were very much counter to the trend last month. All the at-call rate changes it recorded were cuts and it said AMP was the only deposit-taker to make “a significant improvement” to its TD rates.
ME Bank, MyState, St George, Suncorp and Westpac all cut at-call rates in September. BankVic, firstmac, Judo Bank, Macquarie Bank, MOVE and Westpac cut TD rates.
AMP reported in its half-year financial statement that deposits were down 5.1 per cent to A$16.1 billion at June 30, compared with June 30 last year.
Last month, it increased rates by 5 to 35 basis points on terms ranging from four months to five years. It is offering 1 per cent for three years, which is close to the top rate for that term.
The problem for depositors looking for good savings rates is that there are very few other ADIs in AMP Bank’s position.
According to APRA data, total household deposit balances rose 1.4 per cent in August and 4.1 per cent over the past three months (16.4 per cent annualised).
Some ADIs are growing deposits at twice system or more; they include Judo Bank, Macquarie Bank and Macarthur Credit Union.
Judo Bank, which has been the rate leader in the TD market for some time, cut rates on three, six, nine and 12-month terms by up to 20 bps.
It is no longer the rate leader for 12 months but it still offers the highest rates for two years (1.2 per cent), three years (1.15 per cent), four years (1.4 per cent) and five years (1.6 per cent).
For 12 months, the top rate is MyLife MyFinance’s offer of 85 bps.
For terms under 12 months, the top rate is 80 bps, which Bank of us is offering for nine months, MyLife MyFinance is offering for nine months and AMP Bank is offering for 11 months.
In the at-call market, the highest ongoing rate is Macquarie Bank’s offer of 95 bps, the highest introductory rate of Virgin Money offer of 1.5 per cent for three months (dropping back to 1.2 per cent) and the highest ongoing bonus rate is ING’s offer of 1.35 per cent on Savings Maximiser (minimum deposits of $1000 a month plus five debit card transactions).