Big banks eyeing interest rate moves

The National Bank started its push on deposit rates at the weekend, raising its rates by 50 basis points to 7 per cent on a $10,000 one-year term deposit, through a flurry of newspaper advertisements.

Last week, Westpac's rate for a similar deposit was 6.25 per cent and BNZ's was 6.5 per cent.

And the big banks are understood to be eyeing the high interest rates on offer for on-line Internet accounts by smaller players.

A price war could break out on deposit interest rates later this year, after the mortgage rate price war late last year, though big banks may be reluctant to jump in.

Superbank's Super-saver account offers 6.55 per cent, the highest deposit rate for call accounts among the banks.

ASB's Fastsaver rate offers 6.2 per cent both for Internet and phone banking savings accounts.

The rates are high even though money is on call and not locked up in a fixed term. The savings accounts can only be used through Internet or phone banking, not through an ATM or with an Eftpos card.

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