Term Deposit Rates Rise, But Is That Where Your Money Should Be?

Term deposit rates in New Zealand have increased over the past year, but experts warn that savers should not automatically assume this is where their money should be.

In October last year, the average two-year term deposit rate was around 3.5 percent, while the five-year rate was just under 4 percent. By comparison, current rates stand at 4.17 percent and 4.66 percent respectively.

BNZ adjusted its term deposit rates on Friday, increasing its one-year rate to 4.05 percent and its 30-day rate to 1.85 percent. Bank of China also lifted its two-year rate to 4.3 percent.

According to Chris Tennent-Brown, senior economist at ASB, the Reserve Bank's decision on interest rates will have a flow-on effect to higher short-term deposit rates and shorter-term mortgages.