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Save $105 with a term deposit | Dollar Saver tip #72

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Save: up to $105 a year

Tip overview

Term deposits are a way to lock in a guaranteed interest rate on your savings.

When interest rates were very low no one cared about term deposits. But in today's higher rate world term deposits look more attractive.

But if you just stick with your bank you won't get the best possible return.

Did you know? Term deposits are a low-risk way to grow your savings, if you already have a decent amount saved. If you're looking to earn a high interest rate while building up your savings each month, you could consider a high interest savings account.

The Big Four banks all offer decent term deposit rates. The highest you'll get, at time of writing is 4.75% for 12 months with a Commonwealth Bank term deposit.

But looking at Finder's database we can see term deposit rates as high as 5.10% for 12 months.

The higher rate makes a difference. Let's say you put aside $30,000 for 12 months at 4.75%.

You'd earn $1,425 extra in interest.

But at 5.10% you'd finish up with $1,530 in interest. That's $105 more.

You'd save even more if you put a higher amount in the term deposit.

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