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Looking for somewhere safe to put your cash this year? A term deposit gives you a fixed return on your money. Just set, forget, and let it do the hard work.
Find a good rate and boost your savings with our handy table filled with over 90 term deposits.
How to get a good term deposit rate
Here are a few ways to make sure you're getting a good rate:
- Consider smaller lenders, credit unions and digital banks
- Compare term lengths - 6 month rates are often better than 3 month rates
- Look for providers that offer extra interest as a loyalty bonus for sticking with them
- Negotiate your rate with the bank to see if you can get a better deal
6-month term deposit interest rates
- Judo Bank Term deposit: Earn 0.69% p.a. for 6 months with a minimum deposit of $1,000
- RACQ bank term deposit: Earn 0.5% p.a. for 6 months with a minimum deposit of $1,000
- CUA term deposit: Earn 0.5% p.a. for 6 months with a minimum deposit of just $5,000
- Citibank Term Deposit: Earn 0.6% on 3 or 6 month terms with a deposit of $10,000 or more
In comparison, take a look at the 6-month term deposit rates offered by the Big Four: ANZ, CBA, NAB and Westpac.
| Product | Interest rate | Min. deposit |
|---|---|---|
| ANZ term deposit | 0.1% p.a. for 6 months | $5,000 |
| CBA term deposit | 0.1% p.a. for 6 months | $5,000 |
| NAB term deposit | 0.2% p.a. for 6 months | $5,000 |
| Westpac term deposit | 0.15% p.a. for 6 months | $5,000 |
Is a term deposit a good idea at the moment?
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. Because they can change at any time, savings accounts often higher rates than term deposits. So if you're looking for a higher interest rate on your money, a savings account might be a better option for you.
See how savings account rates compare to term deposit rates
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.
Do I have to pay tax on a term deposit?
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.
Paying tax on your term deposit
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
More questions about term deposits
Read more on this topic
- Gateway Bank term deposit
Earn a fixed interest rate on a wide choice of terms with a Gateway Bank personal term deposit.
- Citibank Term Deposit $10K
Earn a competitive fixed interest rate on a 3 or 6 month Citibank term deposit when you invest $10,000 or more.
- Judo Bank Term Deposit
Earn a competitive interest rate plus bonus interest when you roll over your deposit into a new term deposit. Terms from 3 months to 5 years. No fees.
- MyLife MyFinance Term Deposit
Earn a competitive interest rate on terms between 1 month and 2 years with a MyLife MyFinance term deposit.
- ANZ Business Notice Term Deposit
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.
- RACQ Bank Term Deposit
Choose a term from one month to five years and earn a competitive, fixed interest rate on your deposit. This account is for Queenslanders only.
- Locked savings accounts
If you struggle to save, you could benefit from a savings account that won’t allow you to withdraw funds.
- Paying tax on term deposit interest
Find out all about the tax treatment of term deposit interest payments.
- AMP Bank term deposit $100,000+
Earn a competitive interest rate on deposits over $100,000 and enjoy flexible term lengths with the AMP Bank term deposit.
- AMP Bank term deposit $25,000+
With high interest rates offered in a variety of different terms, the AMP term deposit could be ideal for both short and long term saving goals.