NZ deposit rates begin to shift

The Reserve Bank of New Zealand's hike in the official cash rate is finally making an impact on deposit rates, with some banks making an upward adjustment to short-term rates.

However, the increases have not been standard across banks and are mostly available to a minimum quantum of deposits.

ASB was among the first ones to move, hiking interest rates on some of its savings accounts, and is currently offering 3.65 per cent on a NZ$100,000 savings deposit.

The six-month term is the most popular one, with ASB being the first to offer 5.10 per cent in that segment, and now followed by ANZ and Westpac, which are offering similar rates.

National Bank and ANZ (which usually offer similar rates and have the same owner) have decided to diverge this time, with the former offering a special rate of 5.10 per cent on five-month deposits while the latter is offering just 4.0 per cent for the same term.

Longer-term deposit rates have, however, fallen, with Bank of New Zealand lowering its five-year deposits by 25 basis points, and ASB cutting four- and five-year terms. Most of the others continue to offer between 6.20 and 6.75 per cent for five-year terms.

The RBNZ's cash rate hike to 3.0 per cent from 2.75 per cent was met with no reaction from banks for nearly a week, after which ASB became the first to move by raising variable and six-month mortgage rates, but lowering longer-term rates. This strategy was followed by most others, who raised variable home loan rates while at the same time cutting longer-term mortgage rates.