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Why Bank Deposits are so important to all of us !

Updated: Apr 27



When people ask us why we decided to tackle the Bank Deposit market considering that most people did not see any problem in that market, this is a short overview of why this is such an important mission for us, and should be equally important for you:

  1. Bank Deposits is a critical aspect of the Financial Market. Without deposits, banks could not lend money for mortgages,  business finance or infrastructure projects. So it is arguably the MOST important market without which the economy could not function. In Australia, this amounts to a massive $2.3trillion item on the balance sheet

  2. Banking markets tend to be skewed with large concentration by a few dominant banks (about 80%) and then the remainder. This means that smaller banks have to compete strongly to attract the right kind of deposits, whilst the larger banks use their market power to dominate

  3. Opaque pricing. Numerous commissions and reports have found substantial abuse and opaque pricing especially by the larger banks that have massively inflated their profits and caused billions of lost interest to depositors (that means retail investors, SME, NFP, Education, Councils and just about everyone who is not a bank) Very little transparency exists for depositors

  4. Apathy (Too hard to do). The fat years have spoilt many organisations and this has caused people to NOT pay attention to their deposit rates as acutely as they should, and this apathy has enabled the status quo to flourish

  5. Brokers. Some of the above challenges have historically been filled by brokers who have operated in between clients and banks to find the best bank rates. The clear issue with this has been a complete conflict of interest with many of the brokers being paid commissions without clients being aware of the full price and commissions paid.

These are some of the reasons why a fundamental shift must take place within the deposit market and Likwidity as the 1st and Only Unconflicted Platform is doing just that.

See the following research and articles:

Productivity Commission Report into Financial Services

Grattan Institute Fact check on Bank rates of return

ASIC Commission into Bank Deposit Rorts

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Likwidity can source rates from participating banks through a combination of bidding or via bank rate sheets, and the highest rate shown may not always be available by the designated bank or the bank may withdraw such offer and Likwidity does not have control over that. Rates shown and interest benefits are derived from publicly available information and sources and may contain incorrect information.   

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Where Bank credit rates are shown, we source the information directly from the service providers. 

Ratings are shown for Short Term Deposits and are displayed as S&P/ Moody's. For more information on ratings, see our article

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#Rates are generally based on interests paid on maturity. Minimum deposit amount of $2m. Rates are from Australian Banks who are protected by the Australian Government Guarantee Scheme of $250,000

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