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You can compare a range of Australian term deposits with competitive interest rates and different term lengths in this guide. All the term deposit providers listed in the table below are included in the Australian Government Guarantee Scheme, so your deposit up to $250,000 is protected under this initiative.
Term Deposit Offer
Judo Bank Term Deposit Offer
1.20 %p.a.
fixed for 6 months
Term Deposit Offer
Earn a 0.10% p.a. loyalty bonus when you roll over your term. The Judo Bank Term Deposit term lengths range from three months to five years. Minimum opening deposit is $1,000. No account-keeping or set-up fees to pay.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
It's true that interest rates on term deposits and savings accounts are quite low at the moment. This is because the official RBA cash rate is at an all-time low, and home loans rates are at historic lows too.
However, that doesn't mean that term deposits are a bad idea right now. In fact, with increased volatility in the share market and a recession officially declared for Australia, a term deposit is one of the safest places for your cash.
What is a term deposit and why should you invest in one?
A term deposit is a type of savings account that is opened for a certain period of time. During this period your money is locked, so you won't be able to access it (penalties apply if you do). In exchange, your money earns interest according to the interest rate offered by the financial institution when opening the account. This interest rate is fixed, meaning it won't change throughout the life of the term. After the period has ended, you can choose to reinvest a portion or all of the funds at the interest rate stated by your bank, or you can withdraw the funds.
Term deposits are widely considered to be a safe, low-risk investment as, unlike savings accounts, they offer a guaranteed return through a fixed interest rate. Because your money is locked away, banks often offer a higher interest rate on some term deposits than they do on regular savings accounts. If you have a chunk of money you know you won’t need for a while, a term deposit could be a good option. It removes the temptation to spend the money as you'll need to pay a fee if you wish to withdraw before the term is finished.
Term deposit versus savings account
The main difference between a savings account and a term deposit is the ability to access your money. The money in a savings account can be accessed whenever you need it, and there's no costs for withdrawing or depositing money. Term deposits are locked 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.
Another key difference is the interest rate; savings accounts have variable interest rates meaning they can change, while term deposits have fixed interest rates meaning the rate will not change until the term matures.
Term Deposit vs High-interest Savings: What's best for you?
How to compare term deposits
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. But what is best for you, might not be best for someone else. You should look for:
A competitive interest rate
A term length that suits you
A minimum deposit amount you're comfortable with
Ask these questions when comparing term deposits:
How often interest is calculated is it compounded?
do any ongoing fees apply?
What happens if you break the term of your deposit?
Can you withdraw a portion of the deposit without incurring a penalty?
How often will you receive statements?
Can you easily check on the balance in your account (for example with a mobile banking app)?
What happens to the deposit when it matures? For example, will it automatically roll over into another term deposit?
Compare term deposit rates based on duration
If you have a specific term length for which you want to lock away your savings and earn interest, it's crucial to compare the different interest rates available for your desired term length. Use our term length guides below to compare term deposit interest rates for various term deposit lengths.
Yes. If you’ve invested money in a term deposit, you will need to pay tax on the interest income you earn. The amount of tax you'll need to pay on your term deposit interest will depend on your overall taxable income, and it will also depend on when you receive your interest payments.
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. Read our guide to find out how this works.
The Reserve Bank of Australia's (RBA) cash rate is one of the factors that bank's consider when setting their interest rates for deposit products. Given that the RBA aims to keep inflation between 2 - 3%, an interest rate of 2.5% or lower on your term deposit could mean that your investment isn't keeping up with inflation. Term deposits, like other investments, are great when the RBA cash rate is high. But when the cash rate is low, you may want to seek alternatives, such as shares.
Generally a good time to invest in a term deposit is when the RBA cash rate is high, as this normally results in higher interest rates for savings products.
The downside of a term deposit is that you can’t access your money while it is in the account. If you do need to make a withdrawal you'll need to give at least 31 days notice and you’ll be charged a fee for accessing your money before the term has been completed. You could also be charged an interest rate penalty, which could defeat the purpose of the investment in the first place. In cases of extreme financial hardship this rule can be waived."
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.
Most banks will require an Australian residential address in order to open a term deposit.
Alison Banney is the banking and investments editor at Finder. She has written about finance for over seven years, with her work featured on sites including Yahoo Finance, Money Magazine and Dynamic Business. She has previously worked at Westpac, and has written for several other major banks including BCU, Greater Bank and Gateway Credit Union. Alison has a Bachelor of Communications from Newcastle University, with a double major in Journalism and Public Relations. She has ASIC RG146 compliance certificates for Financial Advice, Securities and Managed Investments and Superannuation. Outside of Finder, you’ll likely find her somewhere near the ocean.
This account offers fixed interest rates for terms ranging from one month to five years, so you can enjoy secure, guaranteed returns on your business funds.
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