Our largest bank is front-footing Macquarie's household deposit challenge with yet another hike in their term deposit rate offers

Commbank is bolstering its term deposit position - again - to try and hold off the challenge by Macbank on the household deposit front. 

There will likely be fallout on to other banks, big and small.

CBA has raised its TD offers across the board (apart from the November 28 move where they launched a 4.2% two year TD rate).

Here is what they have shifted, and by how much.

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Most of CBA's rate positions trail Macbank's rates. Commbank seems to be trying to keep the gap low enough so that existing customers don't think it is worthwhile to switch to Macquarie's higher offers. But the gap remains large and Commbank may have to move again.

\If you are a saver, always ask your bank for an interest rate premium on what they advertise on their rate cards.

These moves need to be seen in the light of what is going on with bank lending. This is growing quickly, with enough share for everyone. The latest APRA quarterly data shows total housing lending up +$144 bln for the year to September to just over $2.7 tln, of which the major banks hold almost $2.2 tln. Household deposits are an important source of funding (although not the only source) to enable that lending growth. If any bank suffers deposit growth lower than lending demand, that can crimp lending activity in ways that banks find awkward. 

Every bank watches Macquarie's progress in its rush for deposits. They will have found their expansion unnerving. Savers can currently use that information to their advantage when setting up or rolling over a term deposit.