Numerous banks, including NAB and ANZ, have cut interest rates on term deposit and fixed home loans despite the Reserve Bank of Australia (RBA) holding the cash rate steady. The central bank defied expectations by keeping the cash rate at 3.85 per cent last week, but that doesn’t mean lenders aren’t moving.

NAB cut its term deposit rates today, with decreases of between 5 to 20 basis points across multiple terms. Its 7-month term has been cut by 20 basis points, bringing its leading rate down to 3.80 per cent.

Mozo personal finance expert Rachel Wastell told Yahoo Finance the bank was one of 17 banks who had made term deposit cuts following the RBA’s decision.

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“When 17 banks, both big and small, slash term deposits within a week it’s not a coincidence, it’s a signal,” she said.

“Even after the RBA held, the market kept on cutting these forward-looking products, which shows that lenders are most likely preparing for more rate cuts and that the easing cycle is well and truly underway.”

Fellow Big Four bank ANZ trimmed its 8-month Advance notice term deposit by 10 basis points on Wednesday, bringing its highest rate down to 3.80 per cent.

Other banks that have moved rates downwards include Bank Australia, Judo Bank, and People’s Choice.

Fixed home loan rates are also falling, with Mozo seeing four lenders cut rates following the RBA decision. On Wednesday, QBANK cut its fixed rates by 20 to 30 basis points, with SWS Bank, Coastline Bank and The Capricornian following suit.

Wastell said it was a rate shift and “both savers and borrowers should take the hint”.

“If banks thought rates were staying put, we wouldn’t be seeing term deposits and fixed-rate home loans falling,” she said.

“Fixed rates and term deposits are forward-looking products, so banks adjust them based on where they expect the cash rate (and wholesale funding costs) will go.

“The fact that both big and small lenders are trimming fixed rates across home loans and deposits, even after the RBA paused last week, suggests they’re confident further cash rate cuts are coming and want to get ahead of the curve.”

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When do the major banks expect RBA interest rate cuts?

The major banks all expect the RBA will cut interest rates at the August meeting. They are then split on how many more interest rate cuts are coming.