Wednesday, June 11th, 2014 - Roy Morgan Research

In the last 12 months the number of Australians 14+ who hold a Term Deposit has decreased by an estimated 36,000 (-2%) customers. The decrease in the popularity of Term Deposits is not surprising due to the falling interest rates on Term Deposits, making them no longer as attractive for investors as High Interest Online Accounts (up 102,000), Mortgage Offset Accounts (up 181,000) and Bonus interest Accounts (up 709,000). These figures are based on the latest findings from the Roy Morgan Consumer Single Source Survey of approximately 50,000 people p.a.

High Interest Online Accounts are now the most popular savings account and are held by 5.88 million Australians, an increase of 102,000 over the past 12 months. Bonus Interest or Reward Saver Accounts have clearly been the big growth area with an increase of 709,000 account holders to a total of 4.55 million. Term Deposits holders declined by 36,000 over the last year to 1.97 million and Mortgage Offset Account holders increased by 181,000 to 1.43 million. These changes appear to be largely driven by customers looking for higher interest rates in such a low interest rate environment.  This is highlighted by the rapid growth in Bonus Interest/Reward Saver Accounts where they offer the highest interest and the decline in Term Deposits which offer the lowest.

Change in customer numbers 2013 to 2014

Change in customer numbers

Source: Roy Morgan Consumer Single Source, 12 months to March 2013 and 12 months to March 2014, n= 49,616 (average).Base: Australian 14+

The four major banks have all lost customers holding Term Deposits with Westpac Down by 60,000, CBA down 31,000, NAB down 15,000 and ANZ down 10,000. In order to recover this potential loss of deposits they appear to have employed different strategies/products.

The CBA’s two big growth areas have been Bonus Interest/ Rewards Saver Accounts (up 375,000) and Mortgage Offset Account (up 56,000). The ANZ made up Term Deposit losses with gains in all three other products, as did the NAB.  Westpac had the biggest loss in Term Deposit customer numbers (down 60,000) but had big gains in Bonus Interest/ Reward Saver Accounts (up 208,000).

Change in customer numbers with major savings products at the Big Four Banks 2013 to 2014


Source: Roy Morgan Consumer Single Source, 12 months to March 2013 and 12 months to March 2014, n= 49,616 (average).Base: Australian 14+

Norman Morris, Industry Communications Director Roy Morgan Research says:

"The decline in Term Deposit rates over the last two years has encouraged customers and banks to look at other products that can offer a better return as well as other benefits including flexibility, access etc. While Term Deposits generally remain the major source of bank funding, the rapid growth in the alternatives such as Bonus Interest/Reward Saver Accounts with an increase of over seven hundred thousand customers in the last year and Mortgage Offset Accounts showing an increase of over one hundred and eighty thousand customers, provides real alternatives for many customers.


"The ease of comparing  interest rates, bonus introductory rates and any special offers of Term Deposits and other products means in today’s market it is of paramount importance for all financial institutions to understand their customer’s changing needs and willingness to accept new products. This will ensure customer retention in this highly competitive market.”

View the press release on our website.

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Roy Morgan Research

Roy Morgan Research is Australia's best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
Samantha Wilson
P: (03) 9224 5268


banking, finance, term deposits, cba, anz, nab, westpac




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