Term deposit rates reach 5.60 per cent before the Reserve Bank's decision

The highest advertised rates on 12 month term deposits reached 5.60 per cent in late October 2026. The Reserve Bank of Australia (RBA) announces its next decision on the cash rate, the official interest rate it sets, at 2.30 pm on Tuesday 3 November, and markets now expect a rise.

The highest advertised rates rose again in October

A term deposit holds money with a bank, building society or credit union for a set term at a fixed interest rate. On 1 October, data from the comparison site Canstar showed the highest 12 month rate for a $10,000 deposit at 5.50 per cent, as our article of 9 October reported.

By 28 October, three customer owned banks, Bank Australia, Qudos Bank and Community First Bank, were advertising 5.60 per cent for 12 months, Savings.com.au reported. Two of them had lifted their rate by 0.10 percentage points. Heartland Bank and AMP Bank offered 5.55 per cent for the same term. For shorter terms, the highest rates in the same report were 5.40 per cent for 11 months and 5.35 per cent for six months.

For comparison, the highest term deposit rate in Canstar's database in mid December 2025 was 4.45 per cent, Yahoo Finance reported at the time. The cash rate was then 3.60 per cent. It has since risen four times, to 4.60 per cent from 30 September 2026.

Rates at the largest banks are often lower than the best on offer

Advertised rates differ widely between institutions and terms. Canstar's table of the four major banks' rates, dated 1 October, showed one year rates of 4.70 to 5.30 per cent, with some of the higher rates offered to existing customers. Six month rates were 3.40 to 3.50 per cent, and five year rates 3.80 to 4.00 per cent.

The gap matters most when a deposit matures. A deposit rolled over for a new term takes the rate that institution then offers, which can sit well below the highest rates in the market. Comparing rates before a maturity date can make a noticeable difference to the interest earned over the following year.

Some savings accounts also advertise high rates. Savings.com.au reported a top rate of 6.25 per cent on 28 October, available only for an introductory period of three to four months. Ongoing rates on such accounts often depend on conditions, such as adding a minimum amount each month.

Markets and the major banks expect a rise on 3 November

Annual inflation rose to 4.3 per cent in the year to September, according to the RBA's website. By 30 October, market pricing implied a chance of about 90 per cent of a rise of 0.25 percentage points, which would take the cash rate to 4.85 per cent, ABC News reported. The economists at all four major banks expected that rise.

These are market and bank views. The RBA's Board makes its own decision, and it will publish new forecasts in its Statement on Monetary Policy at the same time. The Reserve Bank's website carries the decision and the cash rate.

Fixing now and waiting each involve a trade off

Because market pricing already points to a rise, some of that expectation may already be reflected in the rates banks offer. Rates can still move after a decision, up or down, depending on what the RBA says and how markets respond.

A term deposit fixes its rate for the whole term. That gives certainty about the interest, but it also means the deposit does not benefit if rates rise during the term. A variable rate on a cash account can move with the cash rate in either direction. Some savers spread money across several maturity dates so that part of it is reinvested at regular intervals at the rates then on offer.

Inflation is also worth keeping in view. With prices up 4.3 per cent over the year to September, the highest 12 month rate of 5.60 per cent sat about 1.3 percentage points above the annual inflation rate, before tax.

The Australian Government's Financial Claims Scheme protects deposits, including term deposits, up to $250,000 for each account holder at each bank, building society or credit union incorporated in Australia. It applies to individuals, companies, trusts and self managed super funds. If the scheme is activated, APRA says it aims to pay account holders within seven calendar days.

We arrange term deposits and high interest cash accounts, along with bonds and managed funds. Your adviser can compare today's published rates for your amount and term, arrange the deposit, and contact you before it matures so the money is not simply rolled over at a lower rate.

If you have a deposit maturing soon, or money you are thinking of fixing, please talk to your adviser about the options and what the coming decision could mean for you.

This article is general information only. It does not take into account your objectives, financial situation or needs, and it is not a recommendation to buy, sell or hold any investment. Figures are as published on the dates given. Past performance is not a reliable indicator of future performance. Read the full risk warning