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What would rate decreases mean for savers?

Interest rates are predicted to drop by mid-2024 but cash savers may be better off if they rethink their savings strategies now.

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National Seniors Term Deposit

  • Finance
  • Read Time: 5 mins

Finally, it appears interest rates have steadied after the Reserve Bank of Australia’s (RBA) recent decision to keep the cash rate target ‘on hold’ at 4.35%. This follows 13 rate rises in less than two years.

The announcement has set market analysts’ predictions in motion, with many predicting that slowing inflation could lead to a rate cut from around the middle of the year.

While borrowers are ready for rates to ease off, long-term money savers have been revelling in the periodic cash boosts to their nest eggs by way of high-interest rate savings and long-term term deposit accounts.

However, talk about the official interest rate being potentially cut this year may see many savings account rates drop. So, what does this all mean for savers?

Cause and effect

Let’s begin with what could be behind a fall in interest rates. There has been an inflation slowdown. SBSNews reports the latest consumer price index showed a slower rate of inflation than economists had expected, prompting discussions of whether rate increases could be over for now and whether we could be entering a period of recession.

A recession in its simplest terms is a fall in economic output. During a recession, gross domestic product (GDP) can periodically decrease. People stop spending and output decreases for businesses. If inflation remains level, there is usually a lesser chance of a recession.

Lock it in

Locking in a high-rate term deposit account now comes with the benefit of retaining the higher interest rate even if market conditions and interest rates fluctuate and drop later. However, it's important to note that you may not be able to switch to a higher rate until the end of the term if interest rates go up.

To address the interest rate uncertainty, a potential solution may be to allocate a portion of your savings into a term deposit account. By doing so, you can secure a fixed rate of interest. It's important to note that this doesn't necessarily have to be a long-term commitment, although longer terms often come with an offering of better interest rates.

When is a term deposit the right choice for you?

Short- and long-term term deposit accounts are regarded as reasonably low-risk products that typically offer higher interest rates than standard savings accounts and are ideal for ‘nest egg’ money that you may want to put away and forget for now.

However, utilising term accounts can mean your money is locked in for a longer period, you may require a minimum amount of money you can deposit, and you may be bound by stricter rules and higher penalties than standard accounts.

If you have cash that you don’t need right away, there’s little chance of losing any money with a term deposit account and a greater chance of earning a little interest on your balance.

National Seniors Term Deposit

With no fees and flexible terms, the National Seniors Term Deposit allows you to lock in a competitive interest rate that’s protected for your fixed term.  

You can earn competitive interest rates up to 5.00% per annum. 

National Seniors members can earn a special rate of 4.95% for 5 months, 4.95% for 6 months, or 5.00% for 7 months on maturity for term deposits over $5,000.

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Moving forward

The steadying of the cash rate target has provided some stability to interest rates after multiple rate increases over a short period, leading to speculation over the possibility of a rate cut later in the year, which could result in a decrease in savings account rates.

Now is the time to consider the best strategies for managing your savings. By staying informed about market developments and exploring different investment options, you can make informed decisions to maximise the growth and security of your savings.

Further reading: SBS News, Reserve Bank of Australia


This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives.

Terms & conditions: 

National Seniors Australia Ltd ABN 89 050 523 003 arranges deposits as an authorised representative (AR 282736) of Auswide Bank Ltd, ABN 40 087 652 060 Australian Financial Services Licence 239686. We do not provide any advice based on any consideration of your objectives, financial situation or needs. A target market determination can be obtained at Before making a decision to invest, please consider the Terms and Conditions. If you make a deposit, we will receive a commission from Auswide Bank. For more information about our relationship with Auswide Bank please read the Financial Services Guide contained in the Terms and Conditions.*This account is protected by the Australian Government deposit guarantee. Up to $250,000 of deposits in ‘protected accounts’ held by an entity with Auswide Bank are covered under the Financial Claims Scheme. Information on the Financial Claims Scheme is available at

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