It really is a wonder that there was a stock market crash here in the mid-1980s. If you look back at the term deposit rates offered at the time, you have to ask yourself why people bothered with risky equities.
Back in 1985 when, ironically, Dire Straits’ Money For Nothing was riding high in the charts, the average six-month term deposit rate was 17.93%. But, on the flip side, average mortgage rates were eye-watering – the floating rate at the time was 17.5%.
However, by Dec 1995, term deposit rates had fallen close to 10 percentage points, to 8.01%. And hand-in-hand with mortgage rates, they continued their decline. Until mid 2021, when they started to climb back up again.
| Average Six-month Term Deposit |
Average Two-year Fixed Mortgage Rate |
|
| Dec 2000 | 6.49% | 7.93% |
| Dec 2005 | 6.90% | 8.27% |
| Dec 2010 | 4.72% | 6.66% |
| Dec 2015 | 3.31% | 5.23% |
| Dec 2020 | 2.63% | 3.51% |
| Dec 2021 | 1.48% | 4.73% |
| Nov 2024 | 5.16% | 6.27% |
Source: www.rbnz.govt.nz/statistics
As inflation eases – it’s now back on target, sitting at 2.2% – term deposits are an attractive investment option. Especially when you consider that the highest one-year rate in Canstar’s Term Deposit Comparison Tool is 6.50%. Our comparison tool evaluates over 470 term deposit rates from 15 providers, and is a great place to research the best rates in the market.
And now is a good time to secure a great return. For as the Reserve Bank continues to cut the Official Cash Rate over coming months, term deposit interest rates are sure to follow.
For a quick overview, we’ve put together three easy-to-scan tables featuring the highest rates (as of 16/12/2024) on our database for:
Plus graphs covering all the term deposit rates currently on offer from major deposit takers.
Note: interest payment frequencies vary. Check Canstar’s comparison tables for full details.
Term deposit best rates: 6-month term
The results based on an investment of $25,000 for 12 months.
| Provider | 6-month rate |
|---|---|
 |
6.50% |
 |
6.30% |
 |
5.15% |
 |
5.15% |
 |
5.10% |
 |
5.10% |
 |
5.10% |
 |
5.10% |
 |
5.05% |
 |
5.05% |
 |
5.05% |
 |
5.05% |
 |
5.05% |
Term deposit best rates: 12-month term
The results based on an investment of $25,000 for 12 months.
| Provider | 12-month rate |
|---|---|
|
6.50% |
|
6.40% |
|
4.90% |
|
4.85% |
|
4.80% |
|
4.80% |
|
4.80% |
|
4.75% |
|
4.75% |
|
4.75% |
|
4.75% |
|
4.75% |
|
4.65% |
Term deposit best rates: 24-month term
The results based on an investment of $25,000 for 12 months.
| Provider | 24-month rate |
|---|---|
|
6.00% |
|
5.80% |
|
4.50% |
|
4.50% |
|
4.50% |
|
4.50% |
|
4.45% |
|
4.40% |
|
4.40% |
|
4.40% |
|
4.35% |
|
4.35% |
|
4.25% |
To view a wider range of term deposit accounts, use Canstar’s Term Deposit Comparison Tool.
Current Deposit Rates
(Rates as of 13/12/2024)
Term deposits: things to consider
While a high interest rate is important, it isn’t the only factor to consider when looking for a term deposit. Some other factors you might want to keep in mind include:
Fixed time period
Choose your time wisely, because term deposits can be inflexible. For example, if you need to access your money before the end of the term, your bank may charge you a penalty fee and ask you to give them a period of notice.
Interest rates
They tend to vary a lot, depending on the provider and the term. As movements in both directions are possible, it pays to shop around.
Compound interest
Interest can be compounded at different frequencies, such as monthly, semi-annually and annually. The compounding frequency, the number of compounding periods and the interest rate will determine the amount of interest earned on a term deposit investment.
Often, you’ll receive less interest on accounts that pay interest more regularly, for example monthly, due to the added benefits of compound interest.
Deposit size
Check whether there is any minimum amount needed to open a term deposit, and if a higher interest rate is offered for a larger amounts. It may be worthwhile depositing more than you originally considered to achieve a better rate.
Fees and charges
Are there any penalties or fees charged for early withdrawals?
Rolling over
As rates are constantly moving, it’s important to be aware that if you roll over your account, you might be fixing at a lower (or higher) amount. Also be aware that sometime you can earn bonus interest if you agree to roll over your term deposit. So check with your provider to see what options you have, and what terms and conditions apply.
For the full rundown of all the up-to-date term deposit rates on Canstar’s database, just click on the button below.
About the author of this page
Bruce Pitchers is the Content Manager at Canstar New Zealand. An experienced finance reporter, Bruce has three decades’ experience as a journalist and has worked for major media companies in Australia, the UK and New Zealand, including ACP, Are Media, Bauer Media Group, Fairfax, Pacific Magazines, News Corp and TVNZ.
Bruce started his career as an entertainment journalist before turning his pen to sport and fitness content, working for some of Australia’s leading sports magazines. Bruce then moved his focus to the world of finance and worked as a freelance writer and editor for The Australian Financial Review, the NZ Financial Markets Authority and major banks and investment companies on both sides of the Tasman.
In his role at Canstar, he has been a regular commentator in the NZ media, including on the Driven, Stuff and One Roof websites, the NZ Herald’s Cooking the Books podcast, Radio NZ, and Newstalk ZB.
Away from his desk at Canstar, Bruce spends many hours creating and editing puzzles for magazine and newspaper titles in the USA and Australasia, including Woman’s Day and New Idea. To that end, he is the co-author of the murder-mystery puzzle book 5 Minute Murder.
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