Reserve Bank figures show that from May to June bank term deposit funds rose $1.38 billion to more than $82.6b – a rise of 1.7%, compared with a 0.7% increase for the previous period.

At the same time depositrates.co.nz recorded that some banks started dropping their term deposit rates. In other words they didn't need high rates to attract money, it was coming because of investor uncertainty in the finance company sector.

On the finance company side we saw the opposite happening with rates increasing. Marac, which recently increased rates, acknowledged that it had to offer higher rates and its offerings now were in the 9% range and this is the first time it had to set its rates "in the nines".

The bank rate decreases last week were mainly centered around longer duration terms. For instance ANZ dropped its three-year term deposit rate 20 basis points to 7.80%, its four year rate was down 30pts to 7.70% and five years down 40pts to 7.60%.

Rabo, which tends to be the leader when it comes to rate increased lowered its one-year rate 15pts to 8.45% and its rates for two years or more by 5pts.

ANZ owned finance company UDC made cuts too. All rates between six-months and five years for amounts of more than $100k were all down by 5 to 15 points, while its six, nine and 18 month rates, and its rates between two and five year's duration for amounts of less than $100k were down by 5 to 15 points.

The only increase was from UDC which put up its call accounts and some of its shorter rates.

However, other finance companies reacted differently. MFS, for instance, launched a six-month special of 9.75% that is open till the end of October. Clearly such an attractive rate is designed to pull in money quickly.

Another to offer attractive rates was Allied Nationwide that put up its one-year rate 25pts to 9.50% for amounts of more than $50,000.

Amongst the building societies there was one key change last week; that was SBS increasing its online saver,, I-save, to 7.75%.