While Americans would lie, cheat, and steal to get a decent interest rate at their local bank, Australians need not worry.
There’s currently an intense interest rate war going down between Australian retail banks. The problem is, as rates continue to increase, more depositors will flock to the bank. Sounds good, but that’s more cash for banks to gamble with and ultimately lose with.
Mish’s Global Economic Analysis: The Reserve Bank has accused the major Australian retail banks of driving up their own funding costs by competing in a retail deposit war that has forced up savings rates to win customers.
The top four banks have engaged in an intense battle over the past year to attract retail deposits and ease their reliance on volatile offshore markets for funding.
The move has resulted in some term deposit rates being higher than mortgage rates for the first time in two decades.