The markets believe that banks are set to move pre-emptively and sever savings rates ahead of another predicted cut in federal interest rates when the Reserve Bank meets next week.
Savers may be running out of time to secure higher rates before they are cut by banks. Furthermore, the Reserve Bank may be tempted to cut rates more severely if it believes that big Australian banks will show resistance to lowering their loan rates, in an effort to ensure that some benefit reaches consumers and retail businesses.
The 6-month UBank term deposit at 6.11% may prove a safe bet, for institutions and savers, as they wait nervously to see how markets develop. However, it is also a sign of banks’ expectations that rates are to remain lower for the foreseeable future.
Savers new to term deposits who opt for the 6-month deal should be aware that banks usually transfer the proceeds of a matured term deposit to a new one, possibly at a lower rate.
Secure your savings rates now while you can, here at Which4U.
Kate Guthrie
