You'll know exactly what your investment's worth with a term deposit.
Finding the right term deposit for your situation can help you reach your savings goal faster. Here at finder.com.au we understand that not all investors are the same, so we've compared a range of term deposits with competitive interest rates and a term that suits you. Find a term deposit in the table below. You can compare your options by indicating your initial investment amount and number of months you intend to invest for. Click on "Calculate" to see how much interest you can earn.
fixed for 6 months
Term Deposit Offer
Enjoy high interest and guaranteed returns from a Citibank Term Deposit Account. Plus no establishment or account keeping fees.
- Minimum investment: $75,000.00
- Monthly fees: $0.00
- Interest payment options: monthly, quarterly, annually or at maturity
Term deposits you can compare today
Unsure if a term deposit is right for you? You can refer to our table below and go straight to the topic that you'd like to learn more about. Or, if you already know which term deposit you'd like to apply for, head to our comparison table above to see the product straight away. Click on the green button to be taken to the bank's website to get your application started and if you'd like to ask any general questions, our staff are here to help.
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What is a fixed deposit account?
A fix deposit is another name for a term deposit. A set amount of money that is locked in an account for a set period of time and earns a set interest rate for the length of the term. Unlike a savings account or transaction account which offer variable interest rates, a term deposit offers a fixed interest rate, meaning the interest rate will not change throughout the life of the term. A standard variable rate will change according to the official RBA cash rate, and may change at any time.
It's easy to find the highest interest rate in our comparison to ensure you get high returns. In the blue comparison table above, click on 'Mths p.a.' section with the term of your choosing. The table will automatically sort the interest rate in ascending order so you can see what the interest rate is.
Ask for unadvertised term deposit ratesIn some cases when you're negotiating with the bank, they can offer an 'off the book' interest rate to gain your business. This is price matching or beating like any consumer product.
Term deposits are widely considered to be a safe investment as they offer a guaranteed return. This financial tool basically a savings account that you cannot access for a set period of time. Since your money is locked away with them, banks usually offer a higher interest rate than average on term deposits than they do on regular savings accounts. This means that if you have a chunk of money that you know you won’t need for a period of time, you can maximise your interest by using a term deposit. You should invest in a term deposit if you are working towards a financial goal, and need your balance to be locked away to stop you from dipping into it. It removes the temptation to spend the money as you will need to pay a fee to do so if you wish to withdraw before the term is finished.
Are term deposits a good way to save money?
Term deposits are great way to save money in the sense that you lock away your money for a period of time (so you can't touch it), and guarantees that you get some kind of return at the end of it. However, during periods of low interest rates, it may not be as effective as other investment types if you're trying to accumulate wealth.
The downside of a term deposit is that you can’t access your money while it is in the account. Well, actually you can, but you’ll pay a fee for accessing your money before your term has been completed. So if, for some reason, you find yourself suddenly in need of money you will find it slightly harder to get to than if it was in a regular savings account. You could be charged an interest rate penalty, which could defeat the purpose of the investment in the first place.
How do I close my term deposit?
If your term deposit has reached maturity, that is, has reached the end of the agreed period then you withdraw all the funds like a regular bank account. However, if your term deposit is still maturing, then your bank will charge a penalty for withdrawing your funds early. To do this, you'll need to get in touch with your bank directly to organise this.
Are term deposits taxable?
The short answer is yes. As an Australian resident, you must pay tax on any income you earn each financial year, and this includes the interest you earn from savings accounts and term deposits. The interest you earn on your term deposit will be taxed at the same marginal tax rate that applies to the rest of your income. You need to declare this interest in the financial year that you receive it. If you do not receive any interest from your term deposit until it reaches maturity, you will only need to claim the interest in the financial year that your account matures and you receive the interest.
Why do I need to give 31 days notice to withdraw funds from my term deposit?
This change in banking policy was made in early 2015 as a way to help relieve some of the stress felt by banks when asked for a return on a term deposit before the agreed upon maturity date. In cases of extreme financial hardship this rule can be waived.
Term deposit versus savings account
If you’re wondering about how a term deposit differs from a savings account, you’re right to question, as the two are remarkably similar. The main difference is the duration. Savings accounts can be accessed wherever, whenever and have no costs for withdrawing or depositing money. Term deposits are fixed rate and will charge you if you need to withdraw your money early. So if you want easy access to your money, then a term deposit might not be right for you.
Are interest rates for savings accounts generally higher than term deposit interest rates?Generally the opposite is true, depending on the interest rate environment. Since you are agreeing to restrict your access to the money for a pre-determined amount of time, you typically will see higher interest rates on term deposits, especially those with long terms.
Term deposit versus treasury bonds
If you’re looking for slightly higher returns, but slightly more risk, then you could also consider investing in bonds. Corporate and government bonds have earned a slightly higher interest rate over the average return from term deposits (bonds averaged annual returns of 7.2% against 5.5% by the average term deposit). But, for that higher return you will have to take on more risk, especially if you choose to invest in corporate bonds. Bonds are easier to sell than term deposits, so if you also feel that you might need to access your money early, term deposits again might lose out.
Term deposit versus other investments
If you are in a position where you have some money that you’re looking to grow, then you’ll probably also be considering investing your money in a managed fund or perhaps in individual stocks. There are two main differences between term deposits and investing.
Like most financial products, there is no best* term deposit account. The account that suits your needs and circumstance the best* is the one you should choose. For term deposits that will mean finding
- An interest rate you like.
- A duration that suits you.
- The minimum amount required to open the account.
Here are some other considerations:
- Term deposits usually don't charge a fee. Term deposits are usually free of charge, although some banks may charge fees or require investment of a certain amount (for example, $1,000). Investing in funds or stocks will always require fees and transaction costs, some of which can frequently cancel out any interest earned on small pools of money.
- Term deposits are considered to be a risk-free investment. Term deposits are fixed rate, which means that your savings rate will never decrease. So you know exactly what you’re getting, ideal for the risk averse or for those who can’t afford risk. Investing in funds or stocks carries significant risk, and you may occasionally end up with less than originally invested.
What are the factors in choosing a term deposit?
You’ll need to consider the following factors when selecting a term deposit:
- Interest rates on the term deposit
- How often interest is calculated and whether or not it is compounded
- Any ongoing fees that may apply
- The period for which the deposit will be held
- What happens if you break the term of your deposit?
- Can you withdraw a portion of the deposit without incurring a penalty?
- How often you will receive statements or be able to check on the balance in your account
- What happens to the deposit when it matures - for example, will it automatically roll over into another term deposit?
You will also need to consider whether the term deposit is offered by a reputable financial institution. However, it’s worth pointing out that as long as your funds are deposited with a bank, building society or credit union that is an Authorised Deposit-taking Institution, your funds (up to $250,000) are guaranteed by the Australian Government.
Where can I find the best interest rate for a term deposit?
You can compare a large selection of term deposit accounts at finder.com.au and find the one that offers the best interest rate. Finder.com.au is the ideal place to compare the rates, features and fees attached to term deposits from reputable banks, building societies and credit unions across Australia.
The latest in banking and investments
How does your bank set the interest rates for its term deposit accounts? Find out in our guide. Read more…
There are several factors that influence how the banks calculate the interest rates on term deposit accounts. Find out what those factors are here. Read more…
Find out all about the tax treatment of term deposit interest payments in this handy guide. Read more…
How safe is the money you invest in a term deposit? Find out in this handy guide. Read more…
What happens to the money in your term deposit account at maturity? Find out here. Read more…
Community Sector Banking Term Deposits offer competitive fixed rates, terms ranging from 1 to 60 months, and a minimum investment of $1,000. Read more…
Is a term deposit right for me?
This depends on your circumstances. If you’ve found yourself with some money, and you want to lock it away to grow for a period of time, but don’t want to take on the risk of the markets, then a term deposit might be right for you. However, term deposits are not suitable for people who might need to access their money.
The Reserve Bank of Australia's (RBA) cash rate is one of the determinants that bank's use to decide on their interest rate. Given that the RBA aims to keep inflation in between 2 - 3%, an interest rate of 3% or lower on your term deposit could mean that your investment isn't even keeping up with inflation. Term deposits, like other investments, are great when the cash rate is high. But when the cash rate is low, you may need to seek alternatives, such as shares.
Is now a good time to invest in a term deposit?
Generally a good time to invest in a term deposit is when interest rates are high, as these normally reflect higher interest rates for savings products.
My parent is currently a non-resident of Australia, can he or she still open a term deposit?
Most banks will let non-residents open a term deposit even though you're not a resident of Australia. However, not supplying a Tax File Number could trigger an automatic tax with-holding of approximately 48%, so if the applicant doesn't have a TFN, it may not be tax-effective to open a term deposit in Australia. Banks should also have an exemption code that they can put in their system to override this for non-residents, so that they're taxed at the foreign resident marginal tax rates instead.
I’ve just emptied my super account – what’s next?
This really depends on your circumstances. For example, if you’re a foreign citizen who was in Australia on a temporary work visa, you may wish to wait until the exchange rate reaches your desired level before you send the money overseas. If you’ve received your super because you’ve reached your ‘preservation age’, you’ll need to decide how you want to use the money to fund your retirement. The best thing you can do is speak to a financial planner about the best way to manage your wealth into the future.Back to top
Foreign currency and your term deposit
Can I deposit foreign cash and not be charged fees?
Yes, this is possible. Many major Australian banks offer foreign currency term deposit accounts that charge low or minimal fees. Examples include the ANZ Foreign Currency Account an HSBC Foreign Currency Term Deposit, so speak to your bank about the foreign cash options they offer.
Can I send a telegraphic transfer to India using OFX?
Yes, OFX allows you to convert Australian Dollars to Indian Rupees and then transfer them to India. Transactions with OFX are also backed by 24-hour customer support from Monday to Friday.
Risk: Investing too much in a term deposit
There are penalties for an early withdrawal of a term deposit, so make sure that you are not going to need any of the money invested prior to the end of the nominated term.
Q. Who is better? UBank or ING Direct? A. Please be mindful that finder.com.au is an online comparison service and is not in a position be recommending specific brands. You may want to speak to a financial planner, or head into a reviews website such as productreview.com.au to see what past customers have reviewed. Q. If the Australian Dollar falls, would it be ideal to invest a term deposits overseas, like USD? A. finder.com.au can only provide general advice and cannot comment on the fluctuation of currency exchange rates. However, if you find that your current Australia returns are performing below sub-optimal level, then you may want to explore other investments overseas. Remember that there are tax considerations, as well as future economic outlooks. Speaking to a financial planner or economist may be a good place to start. Q. Is it possible to negotiate my term deposit interest rate? A. It is possible to negotiate your interest rate, but ultimately its up to the bank's as to whether they're willing to reward you for your loyalty.
At a glance: compare Australian banks' 6 and 12 month term deposit rates
|Product||6 Mths p.a.||12 Mths p.a.|
|UBank Term Deposit Account||2.71% p.a.||2.71% p.a.|
|RaboDirect Term Deposit Account||2.55% p.a.||2.55% p.a.|
|St.George Term Deposit Account||2.20% p.a.||2.55% p.a.|
|Bank of Melbourne Term Deposit||2.20% p.a.||2.55% p.a.|
|BankSA Term Deposit||2.20% p.a.||2.55% p.a.|