Banks act to woo spooked investors

BANKS are cutting interest rates on government-guaranteed savings accounts amid a rush by investors seeking to secure their money away from unpredictable stock markets. Australia's total balance of personal term deposits offered by the banks has increased by 40 per cent this year. But according to Infochoice, rates for term deposits, which lock in funds for 30 days to five years, have fallen as much as 3.75 per cent in the past fortnight. While interest rates for term deposits peaked mid-year at more than 8.7 per cent, offering some of the highest returns in the past decade, most dived after the RBA started cutting back the cash rate. RateCity executive chairman Andrew Willink said banks were reassessing the margin needed to keep attracting funds. "The hungry need for deposits (by banks) has dissipated because governments... [read full story]