Banks in battle for deposit cash

By By Alex Tilbury, News Limited newspapers, December 14, 2009, 14 December 2009

THERE is some fierce competition going on between lenders in the deposit market and consumers are the big winners.

An industry-wide shift has caused lenders to price deposits well above the Reserve Bank's cash rate in a bid to secure retail funding instead of costly wholesale capital.

Australia's $1.3 trillion deposit market became a relatively cheap funding source for the banks as the cost of wholesale funding spiked during the credit crisis.

Analysis of the regulator's monthly banking statistics shows NAB controls $58.5 billion in household deposits, ANZ $61.8 billion, Westpac $64.4 billion while CBA has the biggest market share with $124.7 billion, at the end of October 2009.