Marac cut interest rates on debentures across almost all the terms as the finance company prepares to get a rating upgrade from Standard & Poor's. The rating agency placed Marac's BB+ rating on CreditWatch Positive after the company announced it has signed a binding merger agreement with CBS Canterbury and Southern Cross Building Society that will eventually lead to the entity becoming a bank in mid-2011.

Marac is now offering 5.50% for 12-month guaranteed debentures which compares with 5.20%-5.30% offered by the major banks. Interestingly, Bank of New Zealand seems to be lagging in that term offering a maximum rate of 4.50% for a one-year term.

Fisher & Paykel Finance's rate move was a bit of a surprise with the company shaving off a huge 225 basis points on a 12-month term for guaranteed debentures. The rate is now 4.00% which is the lowest rate offered by the bigger finance companies and is even below the rate that banks offer for that term.

F&P Finance continues to offer 7.50% on 12-month non-guaranteed debentures which is likely the widest spread between guaranteed and non-guaranteed debentures in the market.

Meanwhile Public Trust made rate hikes across all terms beyond six months with the nine-month deposit rate hiked by a massive 140 basis points. Public Trust recently obtained a credit rating from Moody's following the expiry of the exemption period that the Reserve Bank had granted the institution.

And finally Rabobank has turned very aggressive on short-term rates, hiking 30-day deposit rate offered via RaboDirect by 80 basis points and 90-day rate by 85 basis points.  The 30-day rate now stands at 4.05% and the 90-day at 4.45%. The rates are now well above the rate offered by the major banks, with Westpac the only one coming close offering 90-day deposits at 4.20%.