NAB 12 Months Term Deposit 6.8% Per Year

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National Australia Bank Group (NAB)

• 

  SomeGuyOnOzB on 02/12/2009 - 17:52

  +2

  grin nice to see a bit of competition heating up, between the big 4 :)

  Well, price matching at the least …

  ---

  Voting positive and hoping for some more competition (UBank? Raboplus? ING?)

• 

  machej on 02/12/2009 - 20:02

  -1

  Same as Westpac. Not worth it as you can get a normal account for around 5% and the compound interest is better.

  • 

    inherentchoice on 02/12/2009 - 20:34

    If they have compound interest, then isn't the advertised rate the gross rate rather than the actual compounding rate if that makes sense? For example they might advertise 5% paid monthly but they actually only give you 4.89% per month which is the same as 5% pa…

    As a side note it always takes me 12 mins to get through to Westpac's call centre.

  • 

    fergus on 02/12/2009 - 21:04

    +2

    Rates are nominal rates, and compounding does not make a monthly compounding savings account better than 6.8% paid-at-maturity term deposit at the present.

    This may remain the case, it depends on how rates move over the year, by how much and when. I don't think rates will move enough to make savings account rates average higher than 6.8% over the next 12 months. If rates were to rise consistently throughout the year, they'd need go to up over 200 basis points to make the savings account average better.

    On the basis rates don't move at all:

    NAB
    12 month term deposit rate 6.80%
    compounding yearly
    initial $100.00
    after 1 year $106.80

    NAB
    iSaver promo rate 4.90%
    compounding monthly
    initial $100.00
    after 1 year $105.01

    Westpac
    12 month term deposit rate 6.80%
    compounding yearly
    initial $100.00
    after 1 year $106.80

    Westpac
    eSaver promo rate 4.80%
    compounding monthly
    initial $100.00
    after 1 year $104.91

    NAB Ubank
    USaver rate 5.46%
    compounding monthly
    initial $100.00
    after 1 year $105.60

• 

  cute_dimples on 02/12/2009 - 22:03

  UBank compounds daily but is paid monthly right? And don't forget, if you have an automatic savings plan, UBank's rate is actually 5.56%, which will then yield more than the term deposits. Sorry, too lazy to do the calculations but I'm sure someone will..

  • 

    SomeGuyOnOzB on 02/12/2009 - 22:31

    +1

    Not by a long shot …

    National Australia Bank
    6.8% simple on $1,000.00 -> $1,068.00 at the end of the year

    Ubank
    5.56% compound on $1,000.00 -> $1,000.00 x (1 + 5.56% / 365) to the power of 365 -> $1,057.17 approx.

    UBank is nearly 1.1% less than NAB

    ---

    See what inherentchoice says below. What UBank pays is less than standard daily compounding using an advertised annual rate …

  • 

    inherentchoice on 03/12/2009 - 23:52

    +1

    According to the Ubank booklet interest is calculated on the balance at the end of each day, not on the balance plus the interest accrued for the month… so it compounds monthly not daily. Therefore after a year $1000 should be about $1057.04.

    I'm really not sure however if they actually use the advertised 5.56% for their calculations, because they might instead use 5.43% paid monthly which is effectively get 5.56% for the year.

• 

  Bargain055 on 02/12/2009 - 23:51

  Assuming the savings account's interest rate stays the same for a year. (very likely to go up again within the next 12 mths)…

  Personally I would rather keep it in savings account for now. Until the interest rate/hype with RBA stabilised, I would then move it to terms deposit.

  Thanks for the calculations guys!

  • 

    SomeGuyOnOzB on 03/12/2009 - 00:15

    I would like to see UBank's savings rate go up, to stem the flow of savings going into term deposits at other institutions …

    • 

      ggschenkel on 03/12/2009 - 19:55

      Hello - our UBank term deposit rates are pretty good, so I'd be surprised if there was a "flow to stem" :)

      Here are our term deposit rates compared: http://secure2.ubank.com.au/ub/web/term-deposits/term-deposi…

      Speak soon,

      Gerd

      • 

        SomeGuyOnOzB on 04/12/2009 - 00:15

        Thanks; someone posted UBank's new term deposit rate … :)

        Any chance UBank is planning to increase the savings rate as well, as part of the strategy and/or in response to the recent increase in the reserve's rate?

• 

  modsec802 on 03/12/2009 - 00:02

  No better than Westpacs

• 

  muzzamo on 03/12/2009 - 14:17

  +1

  As has been mentioned in the Westpac thread, take the deal into suncorp to get 7.05% as per their policy to beat the majors by 0.25%. 7.05% is unbeatable at the moment…

  • 

    [Deactivated] on 03/12/2009 - 14:30

    It is still a good deal for existing NAB customers right? I don't need to transfer money to another bank, is it worth 0.25%?

    • 

      muzzamo on 03/12/2009 - 14:35

      depends how much money you have - if its 100k then its $250 for your efforts.