
Volt Bank is shutting down: 3 things customers need to do right now
Digital neobank Volt is closing down, and customers have been told to withdraw their money right away.
Read more…Whether you're saving for a specific financial goal or you just want something put away for a rainy day, it's always best to know how you can get the most out of your money. A savings account or a term deposit could be good solutions if you're looking for a high rate of interest on the money your invest: but which one is right for you?
Our savings account vs term deposit calculator makes it easy to work out which account pays the most interest on your balance. All you have to do is follow the steps below to work out whether you are better off with a savings account or a term deposit.
The finder.com.au savings account vs term deposit calculator can help you form a clearer picture of which type of account is right for you. It's quick and easy to use, with the entire process taking just a couple of minutes. All you have to do is fill in the boxes with the below information.
Enter the amount you will deposit into the account once you open it.
Enter the amount you will deposit into the account on a monthly basis. For example, if you plan to contribute $50 a month, enter "50".
Enter the total amount of time (in months) that you will invest your money. You might have a specific deadline for a particular savings goal, or you may simply want to compare what savings account vs term deposit balances will look like in several years' time.
Select whether the interest rate you're receiving is a single ongoing rate or if you have an introductory rate.
This is the maximum interest rate it is possible for you to earn on your savings balance. Bonus saver accounts and reward saver accounts allow you to earn bonus interest on top of the standard variable rate when you satisfy specific conditions, such as depositing a minimum amount each month and limiting your withdrawals. If you don’t have an account that allows you to earn bonus interest, then choose "ongoing rate".
This is the standard interest rate that applies to your savings balance when you do not earn any bonus interest.
This refers to the number of months in which you satisfy the conditions necessary to earn bonus interest on your savings balance. If your account doesn’t offer bonus interest, enter “0” in this field.
Enter your initial deposit. Please note that these are usually fixed due to the nature of a term deposit.
Enter the number of months period of time (in months) that you will invest your funds in a term deposit.
Enter the fixed interest rate that will apply to the balance of your term deposit for the duration of the investment period.
A savings account is a bank account that lets you earn interest on your balance at a variable rate. Interest rates tend to fluctuate in line with changes to the Reserve Bank of Australia’s official cash rate, and you can usually access the funds in your account whenever you wish.
There’s a wide range of savings accounts to choose from, including high-interest savings accounts, online savings accounts and even accounts that pay bonus interest.
Meanwhile, a term deposit lets you invest a specific amount of money for a set period of time, such as 6, 12 or 24 months. During that time, the money you invest earns interest at a fixed rate. Interest is typically paid monthly, annually or when the deposit matures, but you can’t access the funds in your account until the term ends.
If you want to maximise your earning power and enjoy easy access to your funds at the same time, you should consider opening a savings account. Most savings accounts allow you to deposit and withdraw money whenever you need, so you can manage your everyday spending or top up your account whenever you wish.
The main advantages of savings accounts are that they pay a high rate of interest, however, the downside is that if interest rates fall, the interest-earning capacity of your account will also drop.
There are also special types of savings accounts to suit different types of savers. For example, reward saver accounts encourage you to regularly squirrel away money by paying a higher rate of interest to customers who limit their withdrawals and deposit a minimum amount each month. This can be a great incentive for those who have a specific goal they are saving towards.
However, if you’re the type of person who is regularly tempted to dip into your savings and go on a spending spree, you may want to consider a term deposit.
You should consider opening a term deposit if you want a risk-free savings opportunity and the security of guaranteed returns. You cannot dip into your savings, so when you invest money in a term deposit, you will be able to work out exactly what your balance will be when the deposit matures in 6, 12 or however many months.
Another benefit of term deposits is the protection they provide against falling interest rates. If rates are predicted to drop further in the coming months or years, locking your money away in a term deposit with a high interest rate could be a wise decision.
However, if interest rates rise you won't be able to take advantage of this increased earning capacity until your deposit matures. There's also the drawback that if you come into some extra money halfway through the term, you won't just be able to add it to your balance in the same way as you would with a savings account.
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