Banks have been trimming interest rates on term deposits in early 2020, new figures show, as returns to savers continue to be eroded by the global shift towards ultra-low interest rates.
Comparison website Canstar said that since the start of the year, the number of cuts in term deposit interest rates across its panel of banks was more than double the number of rate increases over the same period.
It comes after the Reserve Bank on Friday said rates on term deposits, which are popular with self-funded retirees, had fallen more sharply than other savings rates during 2019, and by more than the decline in the cash rate set by the RBA.
One likely reason for the trend is that banks have been able to raise funds cheaply from international markets, where interest rates have plunged as central banks try to stimulate lacklustre economies. With loan growth also slow, it means the banks have less need to compete aggressively for funds from households.