Thanks for your reply Bandwidth.
I knew that the reserve bank was dropping rates so I expected the fall in rates – hence why I wanted to lock in a high rate term deposit. I just didn’t expect a change in rate pretty much the day that my application was to go through because the last change was less than 2 weeks ago. My disappointment was more a case of not meeting expectation rather than not locking in a rate. 8.1% is pretty good anyway so I’m happy with that. I’ll keep in mind your advice about mindset when share investing since I’m not too successful at that right now. That’s one area I am hoping to improve in.

Regarding suspicion about banks. I am not suspicious enough! I believe that every possibility should be considered and it’s those suspicious people out there (like JeffK!) that help me see the downsides to what I would like to do. It’s not necessarily the number of applications but I believe they COULD have a $ limit that is invested before they decide to lower the rate. Due to the delay in online application and processing, they can change the interest rate when they reach $X to mature on a certain date. Not necessarily a conspiracy but could be a business practice.

I don’t base my decisions on an economist either but consensus between a group of economists tends to reflect the market. Currently the consensus seems to be that there definitely will be a rate cut next month and it’s more a case of how much. Personally, I speculated that there would be a 25 basis point cut and another 25 basis point the month after but with the banks cutting term deposit rates NZ so aggressively, it tends to point to a 50 basis point cut. Seems like the economists (SFX) are leaning towards a 50 basis point cut too:
“NAB would only commit to passing on a rate cut of up to 25 basis points if the Reserve cuts by 50 basis points – and the Sydney Futures Exchange said there was a 61 per cent chance it would”