RNZ<\/a><\/p>\nAs interest rates have risen, term deposits rates have inched up. In October last year, the average two-year rate was just over 3.5%, and the average five-year rate was just under 4%. Now, those rates are at 4.17% and 4.66%, respectively.<\/p>\n
Shorter terms have moved less. The six-month rate has not moved according to the Reserve Bank data, while the one-year rate has picked up from 3.5% to 4%.<\/p>\n
Over that time, the official cash rate has dropped from 2.5% to 2.25% and then lifted to 2.5% again. It will be reviewed next month.<\/p>\n
BNZ adjusted its term deposit rates on Friday, moving its one-year rate to 4.05% and its 30-day rate to 1.85.<\/p>\n
Bank of China lifted its two-year rate to 4.3%.<\/p>\n
Watching the official cash rate<\/p>\n
Squirrel chief executive David Cunningham said he expected the interest rate on short terms deposits to increase if the official cash rate did.<\/p>\n
Chris Tennent-Brown, senior economist at ASB, said it was a difficult environment to predict.<\/p>\n
“The underlying swap rates have been pretty volatile and US long-term interest rates have been pretty volatile as well.”<\/p>\n
He said if the Reserve Bank went ahead with lifting the official cash rate as expected this year, that would flow through to higher short-term deposit rates and shorter-term mortgages.<\/p>\n
Some of the more popular rates were likely to move, he said, but the interest rates offered on long-term term deposits were likely to be more affected by inflation expectations and long-term rates here and overseas.<\/p>\n
“There are a lot of moving parts … we’ve got new things we wouldn’t have been thinking about a week ago with the US Treasury Secretary talking about changes to the duration of the US mortgage market to try to get longer-term rates down there.<\/p>\n
“People’s fear of inflation is bouncing around as much as oil prices are. It’s going to be an interesting six months.”<\/p>\n
Some of the more popular rates were likely to move<\/p>\n
He said people thinking about putting money into a term deposit needed to be sure it was the right option.<\/p>\n
“If you don’t need the money for five or 10 years it’s probably worth having some conversations about whether there are better places to be than in a term deposit. Growth and inflation protection are key there. Inflation is still running ahead of what those popular short-term deposit rates are. So working out a strategy to beat that is really important.<\/p>\n
“But if it’s money for a deposit on a house that you’re planning on buying over the next six months, then you just need that liquidity.”<\/p>\n","protected":false},"excerpt":{"rendered":"Term deposit rates might have a bit further to increase, but savers should ask themselves whether it is…\n","protected":false},"author":2,"featured_media":578871,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[138,219,111,139,69,244],"class_list":["post-578870","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz","tag-personal-finance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/578870","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=578870"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/578870\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/578871"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=578870"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=578870"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=578870"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}