Home Fixed interest Can I negotiate a fixed term deposit rate with the bank?

Can I negotiate a fixed term deposit rate with the bank?

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Getting the highest possible interest rate is key to getting the most out of your term deposit. You can have deposits compared online or discussed your options with a financial advisor, but you may also have questions about negotiating to get a better rate.

When it comes to your savings, you may not realize that you can negotiate the interest rate on your term deposit with your bank. In fact, many banks welcome negotiation when it comes to term deposit rates, especially for deposits over $100,000.

Let’s explore how you can negotiate your fixed term deposit rate with a bank because, after all, if you don’t ask, you don’t get anything.

Steps to negotiate a higher term deposit rate

To gain the upper hand in your negotiations, it might help to identify three things:

  • What price is offered to you?
  • Does the term deposit provider offer higher rates to other customers?
  • Are competitors offering better rates?

Step 1: Does the provider offer better rates?

Spend some time researching the market to find out if your ideal provider offers more competitive rates to other customers. Use our list of companies to see the rates the provider is able to offer.

Keep in mind that these higher rates may apply to different fixed terms, so the provider may encourage you to switch to another fixed term to qualify for this rate. If the term doesn’t suit you, ask anyway if they match that rate for your ideal term.

Step 2: Are competitors offering better rates?

Use our comparison charts to filter a range of term deposits options by their interest rate. You can also enter details such as deposit amount and fixed term to fine-tune your results to suit your personal needs.

If your provider offers you a fixed term deposit rate and a competitor offers a higher one for the same fixed term, you might consider asking the provider to match you, or at least try to do so.

Step 3: Call the provider

You can now pick up the phone and call the term deposit provider. Let the representative know that you’ve seen what they’re willing to offer you as an interest rate, but you’d like a higher rate. Let the representative know:

  1. You know they offer higher rates to other customers and you would like yours to match; and or
  2. A range of competitors are ready to offer you a higher rate.

If you were willing to switch to another fixed rate term to get a higher rate from your term deposit provider, now would be a good time to mention it.

Step 4: Consider your options

If the rep still won’t budge, tell him you’re good to go and he could lose your business. Banks and term deposit providers need your business more than you need theirs, as they use your deposits to help fund things like underwriting home loans.

After all, you now have a list of providers who might offer you a higher rate on your term deposit if you are an eligible candidate. If your provider isn’t playing ball, consider switching to a more competitive option when your current term deposit (if any) comes due.

Everything is negotiable, depending on your deposit

Just like you could negotiate a lower home loan rate with your bank, you can also try to get a higher interest rate on your term deposit. However, there is one key factor that can impact your success: the size of your deposit.

If you have a deposit of $100,000 or more, your lender may be more likely to offer you a higher interest rate. Even if it means paying you more, having a large deposit on its books is also good for the bank. The higher your deposit amount, the greater your bargaining power.

That being said, even if your deposit is less than $100,000, it may be worth discussing this with your bank. You never know when a supplier might want to be generous in encouraging you to become a customer.

Negotiating with your bank could secure you a higher fixed rate, earning you extra interest on your term. You can also discover bonuses or special offers that you can acquire through your bank.