Top TD rate now under 2.5 per cent
After two months of term deposit rate adjustments, the average rates for key terms - three, six, nine and 12 months, and three and five years - are now in a narrow band between 1.79 per cent and 1.91 per cent. That is a range of just 12 basis points.The spread to bond rates is more than 100 bps and the bond market rally, red hot over the last two weeks, is the only saviour for bank net interest margins for the moment.According to the latest Mozo Banking Roundup, the best TD rate in the market is 2.33 per cent, which Bank of Sydney is offering for three and six-month terms.Other top rates include: 2.2 per cent for 12 months, which Firstmac and Goldfields Money are offering; and 2.3 per cent for two years, which Firstmac and Goldfields Money are offering.G&C Mutual Bank is offering 2.2 per cent for terms of three, four and five years - the top rate for those terms. Greater Bank is also offering 2.2 per cent for five years.All four big banks cut TD rates in July. ANZ cut by between five and 55 bps, CBA by up to 60 bps, NAB by up to 15 bps and Westpac cut by up to 20 bps.For terms under 12 months, ANZ's best offer is 2 per cent for five months, CBA's best offer is 1.9 per cent for seven months, NAB's best offer is 2 per cent for four months and Westpac's best offer is 1.95 per cent for three, four and six months.For 12 months, ANZ's rate is 1.85 per cent, CBA's 1.65 per cent, NAB's is 1.75 per cent and Westpac's is 1.75 per cent.Canstar says 64 authorised deposit-taking institutions cut TD rates over the past two months. The average reduction on a 12-month term is 36 bps.Canstar's finance expert Steve Mickenbecker says: "Even though term deposits have taken a hit following the recent cash rate cuts, they remain a bit of a safe haven, at almost 1 percentage point above at-call savings rates.