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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 different term lengths.
You can instantly compare Australian term deposits in the table below by entering your deposit amount and number of months you intend to invest for. Click on "Calculate" to see how much interest you can earn.
fixed for 3 months
A short-term investment option with a guaranteed rate of return. Suited to customers with deposits over $250,000.
You may be wondering what the Big Four banks offer when it comes to term deposit rates, and how this differs to the rates offered by other banks. Compare ANZ, CBA, NAB and Westpac term deposit rates for a $5,000 deposit in a 6-month term below.
| Product | Interest rate | Min. deposit |
|---|---|---|
| ANZ term deposit | 0.85% p.a. for 6 months | $5,000 |
| CBA term deposit | 1.25% p.a. for 6 months | $5,000 |
| NAB term deposit | 1.10% p.a. for 6 months | $5,000 |
| Westpac term deposit | 1.15% p.a. for 6 months | $5,000 |
In comparison, some other banks in Australia seem to offer more competitive interest rates for 6-month term deposits.
| Product | Interest rate | Min. deposit |
|---|---|---|
| Judo Bank Term deposit | 1.90% p.a. for 6 months | $1,000 |
| RACQ bank term deposit | 1.75% p.a. for 6 months | $1,000 |
| Bankwest online term deposit | 1.55% p.a. for 6 months | $1,000 |
| CUA term deposit | 1.85% p.a. for 6 months | $5,000 |
| MyState bank online term deposit | 1.65% p.a. for 6 months | $5,000 |
| Ubank term deposit | 1.70% p.a. for 6 months | $1,000 |
| ME term deposit | 1.75% p.a. for 6 months | $5,000 |
| Bank of Sydney term deposit online exclusive | 1.80% p.a. for 6 months | $1,000 |
Read this guide to compare some of Australia's best term deposit interest rates for January 2020.
A term deposit is an account that is opened for a certain period of time. During this period your funds are locked, so you won't be able to access it (penalties apply if you do). Your money earns interest according to the interest rate that is stated 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.
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:
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.
Can't decide on a term length? Read our guide on choosing between a long-term vs short-term deposit.
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.
Read this guide to find out how your term deposit will be taxed
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.
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