Term deposit competition is "intense"

Banks offering a good term deposit rate have sparked "intense" competition, one expert has said.

There is an "intense" competition among banks to offer a decent rate of term deposits, according to one industry expert.

Jim Stening, managing director of fixed-interest broker Fixed Income Investment Group Securities, said the market is the most competitive it has ever been and there are "great returns with very little risk", reports the Sydney Morning Herald.

His attention has been moved to the deposits because of the rates around and he advised people to use various maturities if they are not keen on putting all their money into one for a year.

Mr Stening's comments reflect writer John Kavanagh's observation that a "significant number" of institutions maintained their online savings accounts rates by three-quarters of a percentage point when the cash rate changed between October and December 2009, ending up at its current 3.75 per cent figure.

But saving may not have been on the mind of Commonwealth Bank customers in January after Symon Brewis-Weston, executive general manager of local business banking at the bank, said there was a "small lift" in consumer spending, including an increase in credit card purchases.

By Joe Letts