A 7 day term deposit can make your money work in the short term.
A term deposit is a fixed investment for a fixed term. Lock-in your interest rate for certainty of future returns and grow your savings balance until the term deposit matures. Investment terms can be as short as 7 days and as long as 5 years. A term deposit with a minimum period of 7 days can be a good short term use of your cash between longer investments.
How does a term deposit with a minimum period of 1 week work?
Lock-in your money for a period as short as 7 days, or for as long as 5 years, and earn interest at a fixed rate. The amount you get on your savings depends on the length of the term deposit and the size of your investment.
You will get interest when the 7 day term deposit matures. Longer term deposit periods give you the option of receiving interest payments monthly through to annually.
At the end of the term deposit period, you can collect your funds or you can roll the investment over to another term deposit.Back to top
How do I compare short-term term deposits?
Take note of these features to aid your comparison of term deposits with a minimum period of 7 days.
- Minimum investment period. What is the minimum and maximum term deposit investment period? Most term deposit providers let you invest your money for periods ranging from 1 - 5 years. A select number of providers offer term deposits for periods as short as 7 days. We show the minimum and maximum term deposit investment period in our term deposit comparison tables.
- Competitive interest rates. Different providers offer different interest rates on their term deposit products. Be sure to compare term deposits before opening an account. The interest rate depends on the amount your investing, the term deposit period and, of course, the term deposit provider.
- Minimum investment amounts. You must invest over a certain amount of money to open a term deposit. Some providers have a $5,000 minimum investment to open an account. This varies from provider to provider so be sure to compare the minimum investment amounts if this is a consideration.
- No monthly fees. Term deposits are generally fee free accounts. The only fee you’re likely to incur is the term deposit early withdrawal fee or break fee.
- Incentive or bonus features. Some term deposit providers offer loyalty perks like bonus interest if you reinvest your funds when your term deposit matures.
What are the pros and cons of such a short investment?
Some of the pros and cons of terms deposits with a minimum investment period of 7 days include:
- Fixed interest rate with guaranteed returns. Term deposits give locked-in returns for a fixed period of time.
- Secure and safe investment. Term deposits are a safe investment. Deposits up to $250,000 held with registered deposit taking institutions are guaranteed by the Australian government.
- Bonuses rewarded for your loyalty. Some term deposit providers give you a loyalty bonus if you roll a term deposit over to another term.
- Funds are liquid. You’ll get full access to your funds only after 7 days.
- Early withdrawal notice. Even if you do need to withdraw your money from your term deposit early, you may still need to give the account provider a period of notice. Some banks and financial institutions need at least 31 days notice before they can give you your funds. Break fees will apply.
- Short term, honeymoon rates. Just as you may get a bonus for rolling over your term deposit when it matures, your rate may drop if you applied for a term deposit with a honeymoon rate.
- Lower interest rates. You may be able to get a better rate with a different savings or investment product if you want to invest for a period of weeks instead of months or years.
What are the risks?
The beauty of a term deposit is that it’s one of the safest ways on the market to invest your money. There is virtually no risk when you invest your money into a term deposit. A fixed rate and a fixed term give you guaranteed future returns and term deposits up to $250,000 are guaranteed by the government. A term deposit is largely a fee product. You shouldn’t incur any fees unless you make a premature withdrawal of your funds from your term deposit account.
- Break fees. You will incur an early withdrawal fee if you want to collect your money before the term deposit matures — that’s when the fixed term is up.
Frequently asked questions
Can I change my term deposit period once after I open the account?
For term deposits over a year in length you can usually request changes to your term deposit term and the interest payment frequency up to seven days after you open the term deposit account.
When do I get paid interest?
Interest is paid to you monthly, quarterly, every six months, every year or at maturity when the term deposit period is up. You can add the interest to the initial deposit or get the interest paid to a different bank account of your choosing.
When the term deposit period is finished, you can roll the investment to another term deposit, you can collect the funds at a NAB branch or you can elect to transfer the funds to a nominated bank account in Australia.
What’s the maximum amount I can invest?
Term deposit providers may or may not have a maximum amount you can invest. If there is no maximum amount displayed by the provider you can invest as much as you like; however, you may be subject to different interest rate if you want to invest more than $500,000.