If anyone is looking for the best term deposit rate to park some cash, look well outside the Big Four Banks.

Last week Westpac set the pattern when it cut its term deposit rates. Usually the bank compensates for this by improving or maintaining its rates for longer term savers, but in this case deposit interest rates going out as far as five years were cut, by as much as 50 bps.

A look at the comparative term deposit rates on offer shows that the Big Four are among the most miserly. I guess they don’t make those big profits by being generous.

And it seems the larger the bank, the lower the interest rate on offer. Citibank, one of the largest banking institutions in the world, is offering 1.5 percent on a one year deposit.

For a good deal, check out the smaller challenger banks. Arab Bank isn’t on many people’s radar, but they are offering 3 percent.

Strangely enough, Westpac subsidiaries St George and the Bank of Melbourne are more generous than their much larger parent, offering 3 percent, while the little known Bank of Baroda and Dutch bank ING are the best at 3.05 percent.

Most analysts are anticipating more cuts in official interest rates from the Reserve Bank over 2017, down from the current record low of 1.5 percent.

What happens to deposit rates, and mortgage rates of course, after that will be worth watching.

In the past, both used to move in step with the RBA but there is an increasingly disconnect. The banks are more concerned with shoring up their funding – around two thirds of which comes from local savers – and their profits, hence the reluctance to lower mortgage rates.

From the saver’s perspective, and that of the investor, it’s a confusing market. Where can anyone go to make any money?

Savers aren’t being rewarded and the sharemarket is going sideways.

No wonder everyone is looking at property, but that market has its issues with some capital cities going backwards, and regular predictions that the apartment building glut will end in tears.

With that in mind 3.05 percent starts to look attractive.

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