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What are my options when my term deposit matures?

What term deposit maturity means and what happens to your money when it occurs.

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A term deposit offers a safe and secure way to invest your money and enjoy guaranteed returns for a set period of time of your choice, from one month to five years. When the term length ends, this is known as reaching maturity. When your term deposit matures you have a few options, which well take you through int this guide.

Term Deposit Offer

MyState Bank Online Term Deposit

1 % p.a.

fixed for 12 months

Term Deposit Offer

Single or joint account-holders can apply online with MyState's online application process.
Pay no account setup or ongoing fees and choose a term length between 3 months and 2 years, with interest paid at maturity.

  • Minimum investment: $5,000
  • Monthly fees: $0
  • Interest payment options: maturity
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Term deposits you can compare today

Data indicated here is updated regularly
Name Product 3 Mths p.a. 4 Mths p.a. 5 Mths p.a. 6 Mths p.a. 7 Mths p.a. 12 Mths p.a. 24 Mths p.a.
MyState Bank Online Term Deposit
0.75%
0.75%
0.70%
0.85%
0.85%
1.00%
1.05%
Single or joint account-holders can apply online with MyState's online application process.
Pay no account setup or ongoing fees and choose a term length between 3 months and 2 years, with interest paid at maturity.
Citibank Term Deposit $10,000
0.55%
-
-
0.55%
-
0.55%
-
Suited to customers with deposits between $10,000 and $249,999.
This term deposit is for new Citibank customers only
Citibank Term Deposit 250K
0.90%
-
-
0.90%
-
-
-
A short-term investment option with a guaranteed rate of return.
Suited to customers with deposits over $250,000.
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What is term deposit maturity?

When you open a term deposit, you can choose the length of time for which you want to invest your money. This is known as the term, and terms typically range from 1 to 60 months. Once you’ve deposited your money, it’s locked away for the entirety of the term you choose.

When the term of your deposit comes to an end, this is when your term deposit reaches maturity. Once a deposit has matured, you can access the funds you initially invested as well as any interest that has been paid into the account.

What happens when my term deposit matures?

When a term deposit matures, your investment is complete and your account is officially closed. Access restrictions that apply during the term (see below) are lifted, allowing you to re-invest your money in another term deposit, invest it elsewhere, or simply withdraw it to use however you like. Your bank will usually contact you in the weeks leading up to your term deposit maturity date to let you know the term is about to end and outline the options available.

There are several possible steps you can take when a term deposit reaches maturity. You can:

Take no action

Often, if you do nothing and take no action your funds will be rolled over into a new term deposit with the same term length. The bank’s current interest rate for your chosen term will apply to your new investment. While this can be a convenient way to continue building a bigger savings balance, the downside is that your bank’s current interest rate may not be competitive with the rates on offer elsewhere. Investing your money for the same term length may also not be suitable, so it’s usually a good idea to compare your options and consider choosing a new term and interest rate.

Choose a new term deposit

Now is the perfect time to shop around and consider your investment needs. If you want to open another term deposit, have a think about a suitable investment time frame for you. Then you can compare the interest rates on offer from your bank and other financial institutions. If opening a new term deposit, you may wish to top up your balance with extra funds. The more you invest, the greater your interest returns will be.

Withdraw some and invest the rest

You may want to withdraw some of the money to fund other purchases and investments, but invest the remainder in a new term deposit.

Withdraw it and invest it elsewhere

You can withdraw the money from the account and invest it elsewhere, for example in the share market or if you've decided to buy a property.

Withdraw it and open a high interest savings account

You can withdraw the money from the term deposit and open a high interest savings account instead. High interest savings accounts are another low-risk way to invest your money, and they usually offer better interest rates than term deposits. Some savings accounts, known as bonus savers, will offer a higher interest rate each month you meet a few conditions, like depositing a certain amount of money into the account. This is a great way to keep up good savings habits, and put the money earned from your term deposit back to work.

Compare savings accounts below

Data indicated here is updated regularly
$
$
months
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned
Westpac Life (18-29 year olds only)
3%
0.4%
2.6%
$0
$0 / $0
Under 30? You can earn an ongoing, variable 3% p.a. each month you grow your balance (excluding interest earned) and make 5+ transactions from your linked Westpac Choice transaction account. This bonus rate offer is available on balances up to $30,000 for customers aged 18-29.
Westpac Life (18-29 year olds only)
0.85%
0.4%
0.45%
$0
$0 / $0
Under 30? You can earn an ongoing, variable 0.85% p.a. each month you grow your balance (excluding interest earned) and make 5+ transactions from your linked Westpac Choice transaction account. This bonus rate offer is available on balances up to $30,000 for customers aged 18-29.
MyState Bank Bonus Saver Account
1.65%
0.15%
1.5%
$0
$0 / $0
Ongoing, variable 1.65% p.a. when you deposit at least $20 into the account each month and make five or more Visa Debit card transactions from a linked MyState transaction account.
Citibank Online Saver
1.55%
0.35%
1.2%
$0
$0 / $0
Introductory rate of 1.55% p.a. for 4 months, reverting to a rate of 0.35% p.a. Available on balances Up to $500,000.
Citibank Online Saver
0.35%
0.35%
0%
$0
$0 / $0
Introductory rate of 0.35% p.a. for months, reverting to a rate of 0.35% p.a. Available on balances Up to $500,000.
IMB Reward Saver Account
1.3%
0.65%
0.65%
$0
$0 / $1
Introductory rate of 1.3% p.a. for the first 4 months when you deposit $50+ each month and make no withdrawals per month. Available on balance of $5,000 or higher.
Westpac Life
0.85%
0.4%
0.45%
$0
$0 / $0
Ongoing, variable 0.85% p.a. each month you deposit money, and make sure your balance is higher at the end of the month than it was at the beginning. No monthly account-keeping fee.
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Can I access the funds in my term deposit before maturity?

One of the key benefits of term deposits is that it’s quite difficult to access your funds before maturity. This removes the temptation to dip into your savings and spend the money that is meant to be set aside for something else.

However, while it is difficult to access your term deposit before maturity it’s not impossible, but there are terms and conditions attached. First, many banks will require you to provide written notice before you can withdraw your funds, and this notice typically has to be provided 31 days in advance. So if you want to access the money in your term deposit to meet urgent expenses, this restriction can cause problems.

Second, and perhaps more significant, is the fact that you will usually be charged with a fee and an interest rate penalty for withdrawing your funds early. Your bank will have a set formula for calculating how much to reduce the interest earned on your account, and in some cases you may actually have to repay some of the interest you have already been paid.

With this in mind, it’s important to think carefully about whether or not a term deposit is right for you before opening an account.

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2 Responses

  1. Default Gravatar
    HenryJune 22, 2017

    At maturity will my term deposit be paid on a weekend?

    • Default Gravatar
      JonathanJune 22, 2017

      Hi Henry!

      It is usually paid out the next business day of your maturity date, unless the bank has operations during weekends that they consider.

      Hope this helps.

      Cheers,
      Jonathan

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