What affects term deposit rates?

The Reserve Bank’s May 2026 Bulletin says most term deposits are priced against bank bill swap rates, "which are strongly influenced by expectations for the cash rate". So a term deposit rate reflects not just today’s cash rate but where the market expects it to go over the term. Long terms price in expected cuts or rises before they happen, which is how a five-year rate can sit below a one-year rate when cuts are expected.

The same Bulletin reports that new term deposit rates "have adjusted broadly in line with the cash rate" over the period it studied, reflecting that pricing against market benchmarks, while at-call deposit rates moved by less. The rate changes page puts every Reserve Bank decision next to the moves banks made around it.

Deposits are the largest source of bank funding; the RBA puts them at around two-thirds of the major banks’ funding. A bank that wants more deposits can pay up for them, and one that has enough need not. That is one reason the same term can pay different rates at two banks on the same day.

On 10 Oct 2026 the highest comparable twelve-month rate in this snapshot was 5.60%, and the median of the 75 ranked brands publishing that term was 5.25%. The gap between the highest rate and the median does not say why it exists; funding needs, product conditions and competition can all contribute.

Rates change on individual days, not all at once, and the feed records the change without the reason. The week-by-week tally shows how many banks moved and which way, alongside the cash rate decisions.

A longer term fixes today’s rate for longer, which helps if rates fall and costs if they rise. A shorter term allows earlier reinvestment, at whatever rate is then on offer, and a savings account’s rate can move either way. Expectations about the cash rate are already in the prices, so no term is a free bet. A ladder spreads the dates.