There are great deals to be had on term deposit rates as banks seek to secure funds for home lending that were previously sourced offshore. Following the global financial crisis, the Big 4 banks are increasingly lifting the percentage of funds they access locally from depositors, and have no other option but to continue to do so for the foreseeable future.   Australian banks are battling for your savings, resulting in extremely favourable term deposit rates.

The big 4 banks (Westpac, Commonwealth, ANZ and NAB), and their subsiduaries such as St.George and UBank, are offering the highest term deposit rates. Smaller players struggle to absorb paying higher term deposit rates without lifting their lending rates and becoming uncompetitive.

As at January 2012, UBank are running a market leading rate of 6.11% p.a. for a 6 month term.

Immediately folllowing the GFC, back in December 2009, Westpac had an 8% p.a. offer (60 month term) in the market, St.George also matched its parent company's offer to be offering the highest term deposit rate in the market. These offers, gone now, demonstrates there are some the best term deposit rates on the market we have seen in Australia some years, though you do have to shop and compare term deposits to find them.

But the party will not last forever. Eventually the requirement for local deposits will fade as global funding pressures ease. Now might be the best time in years to secure the best term deposit rate.