So, if interest rates have started to go up (notable as the final upswing in the swap rate graph above), why have most Term Deposit rates not followed suit? There are many factors, but the one overriding reason is that the banks don’t really need your money at the moment.

Late last year The Reserve Bank of New Zealand introduced a Funding for Lending Programme, which gives registered bank access to funds at the Official Cash Rate, which is currently set at 0.25%. The total amount available under this programme is $28 billion.

Hence the high street banks aren’t as worried as they used to be about whether or not you roll over your Term Deposit.

If the limited income you receive from term deposits is causing concern please contact your adviser at Hamilton Hindin Greene who can assess whether there are alternative strategies that are suitable for you.