This article provides general information only and does not constitute personal financial advice. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on any information in this article, you should consider whether it is appropriate for you and seek advice from a licensed financial adviser if necessary.

The Reserve Bank of Australia (RBA) held the official cash rate steady at 4.35% at its September 2026 meeting, maintaining the rate for the fifth consecutive month. While no change might sound uneventful, the decision has direct and immediate consequences for two popular banking products: offset accounts and term deposits.

What happened at the September meeting

The RBA Board decided to leave the cash rate unchanged, citing the need to keep inflation within the 2 to 3% target band while monitoring economic conditions. According to the Reserve Bank of Australia, the Board noted that inflation remains above target but has eased from its peak, and the labour market has softened slightly.

For households and savers, the practical question is simple: what does this mean for the money sitting in offset accounts or locked into term deposits?

Offset accounts: no change to your effective rate

Offset accounts are transaction accounts linked to a variable-rate home loan. The balance in your offset account reduces the loan principal on which interest is calculated, effectively earning you a return equal to your mortgage rate.

Because offset accounts are tied to variable home loans, and variable rates track the RBA cash rate, a rate hold means your offset benefit stays the same. If your mortgage rate is 6.5%, every dollar in your offset account continues to save you 6.5% per year in interest (tax-free, because it is a saving rather than taxable income).

Key point: offset accounts respond immediately to RBA moves. A hold means stability, a cut would reduce your benefit, and a rise would increase it. For now, your offset value is locked at your current mortgage rate (as of September 2026; verify current terms with your lender).

Some lenders adjust variable rates independently of RBA moves, so check your loan’s rate schedule. The offset benefit always equals your actual loan rate, not the cash rate.

Term deposits: new rates reflect the hold, existing deposits are unaffected

Term deposits are fixed-rate products. Once you lock in a term deposit, your rate is guaranteed for the term (commonly 3, 6, or 12 months), regardless of what the RBA does next. If you opened a 12-month term deposit in August at 4.8%, you will receive 4.8% until maturity, even if the RBA cuts rates tomorrow.

Read also: RBA July Rate Decision: Planning Your Savings and Offset Response in Australia

The RBA decision affects new term deposits only. When the cash rate holds steady, authorised deposit-taking institutions (ADIs) typically hold their advertised term deposit rates steady as well, though competitive pressure can shift rates between banks.

As of September 2026, major ADI term deposit rates for 12-month deposits range from approximately 4.5% to 5.0%, according to comparison data from Canstar. A rate hold suggests these ranges will remain stable in the near term, though individual institutions may adjust offers to attract deposits or manage liquidity.

Key point: if you are considering opening a new term deposit, shop around now. Rates are unlikely to rise in the immediate term given the RBA hold, but if the RBA signals a future cut, some ADIs may lower advertised rates in anticipation. Lock in competitive rates while they are available (compare at moneysmart.gov.au or comparison sites like Canstar or Finder).

What to do next

For offset account holders: continue using your offset as a high-yield, flexible savings vehicle. The effective return (equal to your loan rate) typically exceeds standard savings account rates, and the tax-free structure makes it especially valuable for borrowers in higher tax brackets.

For term deposit savers: if you are holding cash outside the market and want certainty, compare current term deposit rates across multiple ADIs. Remember the Financial Claims Scheme guarantees deposits up to $250,000 per account holder per ADI, so consider spreading large balances across institutions if you exceed that threshold.

For both: monitor the RBA’s forward guidance. If the Board signals a rate cut is likely at the next meeting (October 2026), offset holders will see their benefit fall, and term deposit rates may decline before the official move. If a hold is expected to continue, current settings remain stable.

Foundational principles of interest rate transmission, as covered in Principles of Finance (OpenStax, 2022), explain that central bank policy rates flow through to retail banking products with varying speed and completeness. Offset accounts and variable loans adjust quickly; term deposits reflect forward expectations and competitive dynamics.

Always verify current rates and terms at ASIC MoneySmart or directly with your ADI before committing funds. Past performance and current advertised rates are not a reliable indicator of future returns, and all deposit rates are subject to change.