Save with balance transfers, 0% deals & platinum perks exclusive to finder
Compare cards
Best business term deposit rates

Compare the best business term deposit rates

Find the best term deposit rates and boost the bank balance of your business.

If you’ve got some extra cash that’s not immediately required for the day-to-day running of your business, investing those funds in a business term deposit could be a worthwhile option. Term deposits provide competitive interest rates and the security of guaranteed returns, helping you save towards whatever financial goals you have for your business.

But how can you find the best business term deposit rates and maximise your savings? Read on.

RaboDirect Business Term Deposit

Business Term Deposit Offer

With a RaboDirect Business Term Deposit you will receive a high rate on your deposits, with terms ranging from 31 days up to 5 years.

  • Minimum investment amount: $1,000
  • No account keeping fees
  • Receive a loyalty bonus of 0.10% p.a

    Compare business term deposits below

    Rates last updated July 26th, 2017
    $
    Name Product 3 Mths p.a. 4 Mths p.a. 6 Mths p.a. 12 Mths p.a. 24 Mths p.a. 36 Mths p.a. 48 Mths p.a. 60 Mths p.a. Min Deposit Interest Earned
    RaboDirect Business Term Deposit
    2.30%
    -
    2.55%
    2.55%
    2.90%
    3.00%
    3.05%
    3.30%
    $1,000
    Westpac Business Term Deposit
    2.05%
    1.85%
    2.10%
    2.35%
    2.40%
    2.50%
    2.60%
    2.85%
    $5,000
    ING DIRECT Business Term Deposit
    2.00%
    2.40%
    2.60%
    2.70%
    2.90%
    -
    -
    -
    $10,000
    Bankwest Business Term Deposit Direct
    2.35%
    1.50%
    2.55%
    2.55%
    2.60%
    2.60%
    2.65%
    2.65%
    $10,000

    Compare up to 4 providers

    What is a business term deposit?

    A term deposit is a type of bank account that allows you to earn a fixed rate of interest on your money for a set period of time. For example, you might invest $10,000 to earn interest at a rate of 3.00% p.a. for a period of 12 months. Once one year has passed, you will have earnt $300 in interest without lifting a finger.

    While you can open a term deposit to grow your personal savings, a business term deposit is designed to help boost your business savings. Providing the security of a fixed interest rate and guaranteed returns, they offer a safe and risk-free way to improve your financial position.

    Why should I open a business term deposit?

    Every business owner is aware that there are always parts of any business that could do with a little extra money – so what are the advantages of putting your savings in a business term deposit instead of investing elsewhere? There are many:

    Consistent returns

    When you put money in a term deposit, you know what you are getting upfront. A fixed interest rate and a set investment period means you know exactly how much interest your term deposit will earn and can therefore include that amount in future financial calculations.

    Your money is guaranteed

    Savings balances of up to $250,000 are guaranteed by the Australian government, so there is virtually no risk of losing your money.

    Boost your business savings

    Business term deposits offer a simple way to make your money work harder for you, allowing you to safely improve the overall financial standing of your business.

    High interest rate

    Term deposits offer a higher interest rate than many other types of bank accounts, including many online savings accounts. And because the interest rate is fixed, you’ll be protected against any interest rate drops that may occur.

    You may also be interested in

    How to find the best business term deposit rates

    In order to maximise the savings for your business, it’s important to shop around and find the best business term deposit rates. However, there are several factors that can impact the interest rate on offer on different term deposit accounts, including:

    The term

    The interest rate that applies to term deposits varies depending on the investment term you choose, with terms ranging from 30 days up to five years. For example, at the time of writing, if you deposited $10,000 in a CommBank term deposit, the interest rate on a 36-month term (3.20% p.a.) would have been much higher than the rate on a three-month term (2.05% p.a.).

    The amount you deposit

    Different interest rates also apply based on the amount you invest. For example, your bank may offer higher interest rates if you deposit an amount greater than $25,000, as opposed to if you park a smaller sum of maybe $5,000 in a term deposit.

    Bonus interest

    To encourage you to remain a loyal customer, when a term deposit matures, some banks may offer you a “loyalty bonus” in the form of a bonus interest rate if you rollover your funds into a new term deposit.

    The bank you choose

    Just like with home loans and savings accounts, the specific interest rates on offer vary depending on the bank, building society or credit union you choose.

    Taking all these factors into account, it’s clear that the most effective way to find the best business term deposit rates is to compare a range of options. This will help you find the highest interest rate for your desired investment amount and term.

    Finding the best interest rate

    Don’t think it’s all that important to shop around for the best interest rate? Let’s take a look at the example of Kevin, who has $50,000 to invest to provide a future financial windfall for his business. As he is not expecting any major expenses to arise or any cashflow problems to develop any time soon, Kevin decides to compare a range of five-year business term deposit rates at finder.com.au.

    While his current bank is offering an interest rate of 2.65% p.a., Kevin finds another financial institution offering fixed interest of 3.30% p.a. Both accounts pay interest annually. He calculates the difference in interest-earning power between the two accounts to see how much the change in interest rate could boost his bottom line.

    As the table below shows, by choosing the higher interest rate of Account 2, Kevin can earn an extra $1,827.22 in interest over five years.

    Account 1Account 2
    Interest rate2.65% p.a.3.30% p.a.
    Deposit amount $50,000$50,000
    Investment term5 years5 years
    Interest earned$6,985.55$8,812.77
    Balance at maturity$56,985.55$58,812.77

    Other factors to consider when choosing a term deposit

    While the interest rate is a crucial factor when choosing a business term deposit, you should also remember to look at a range of other features, including:

    Minimum deposit amount

    Check to see what the minimum amount is that you can deposit into the account, for example $10,000. Also remember to check whether any maximum limit applies.

    How often interest is paid

    Read the fine print to find out when the interest on your term deposit is compounded. Accounts that compound interest monthly, for example, provide greater interest-earning power than accounts that compound annually.

    Fees

    Although many term deposits do not charge any fees, it’s worth making sure there are no setup or account-keeping fees attached.

    Loyalty bonus

    Some banks will provide a loyalty bonus, in the form of an increased interest rate, if you elect to rollover your matured term deposit into a new term deposit account with the same institution. This can provide a further boost to your earning power.

    Foreign currency options

    If your business operates internationally and you regularly deal in more than one currency, it may be worth checking whether your bank offers the option of holding term deposits in foreign currencies.

    Are there any disadvantages of business term deposits?

    The major disadvantage of investing money in a business term deposit is that the funds are locked away until the deposit matures. While you may be able to access your money before the term ends, you can wave goodbye to any interest you stood to earn and could also have to pay a sizeable fee. With this in mind, if you experience a cashflow problem or if a once-in-a-lifetime business opportunity arises and you need urgent funds, having your money tied up in a term deposit could cause problems.

    The other main disadvantage to be aware of is what happens to your money when the deposit matures. In many cases it will simply rollover into a new term deposit, which may not offer the most competitive rate, so it’s important to compare your options and check whether there are any other business term deposits with better interest rates available.

    Finally, remember that while a business term deposit offers protection against falling interest rates, it also means that you won’t be able to take advantage of any rate rises that occur. Instead, you’ll have to wait for the funds to mature before you can invest your money at a higher rate.

    Tim Falk

    A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

    Was this content helpful to you? No  Yes

    Related Posts

    Savings Account Offers

    Learn about our information service
    ING DIRECT Savings Maximiser

    Maximum Variable Rate

    2.80

    Standard Variable Rate

    1.50
    ME Online Savings Account

    Maximum Variable Rate

    3.05

    Standard Variable Rate

    1.30
    ANZ Progress Saver

    Maximum Variable Rate

    1.81

    Standard Variable Rate

    0.01
    Bankwest Hero Saver

    Maximum Variable Rate

    2.65

    Standard Variable Rate

    0.01

    Ask an Expert

    You are about to post a question on finder.com.au:

    • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
    • finder.com.au is a financial comparison and information service, not a bank or product provider
    • We cannot provide you with personal advice or recommendations
    • Your answer might already be waiting – check previous questions below to see if yours has already been asked

    Finder only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.
    Ask a question
    feedback