A 12 month term deposit locks your money away for one year, and offers you a competitive fixed interest rate on your balance. It's a great way to help you reach medium to long term savings goals; because the interest rate is fixed you can easily calculate how much your investment will earn over the life of the term. You can't access your money until the term expires, so you won't be able to waste it on impulse purchases.
Learn how 12 month term deposits work in this guide, and compare current 12 month term deposit rates in Australia.
Compare 12 month term deposit rates
finder.com.au's featured 12 month term deposits
|Product name||12 months p.a. (at maturity)|
|ME Term Deposit||1.90% p.a.|
|AMP Term Deposit||2.00% p.a.|
|UBank Term Deposit||1.95% p.a.|
|RACQ Bank Term Deposit||1.90% p.a.|
|MyState Bank Online Term Deposit||1.85% p.a.|
|Firstmac Term Deposit||2.20% p.a.|
|Bankwest Online Term Deposit||1.60% p.a.|
|St.George Term Deposit||1.65% p.a.|
Are you over 55 years old and looking for a flexible 12 month term deposit?
If you're over 55 years old and are looking for a flexible term deposit option, the Suncorp 55 Plus Account might be a good option to consider. This account offers the flexibility of an everyday transaction account, with the option to lock away only a portion of your balance and earn a higher fixed interest rate up to 2.55% p.a. You can still access the rest of your money in the account for day-to-day spending. Take a look at the Suncorp 55 Plus account here.
What is a term deposit?
A term deposit is a type of savings account where you deposit a certain amount of money for an agreed period of time and earn a fixed rate of interest. You can choose how long you want to lock your money away, from as little as one month to five years. The fixed interest rate will be determined by the financial provider or bank, and the rates will vary between providers. Term deposits are different from a savings account because you can't access the funds. If you do need to access the money before the term ends (known as maturity), you'll need to give at least 31 days' notice and will likely need to pay a penalty.
Which 12 month term deposit is best?
There is no term deposit that is best, and what is best for you might not be best for someone else. The right term deposit for you will have a competitive interest rate and be a length that suits you. If you don't want to commit to a 12 month term, consider a 6-month term deposit or even a 3-month term deposit instead.
Use our term deposit calculator
Use our term deposit calculator to find out how much interest you could earn over 12 months.
- Deposit amount: enter your deposit amount.
- Interest: enter the interest rate offered on your 12 month term deposit (for example 3.00%).
- Saving term: enter the number of months (12) your investment will be held.
How do I earn interest with a term deposit?
A term deposit gives you a fixed interest rate in return for investing your money for a fixed amount of time. For example, if you opt for a 12 month term deposit you will lock away your funds for one year and you can't withdraw the money. In return, your bank awards you a competitive interest rate that's traditionally higher than a savings account.
You can elect to receive interest payments monthly or all at once after your term deposit reaches maturity. You can often elect which Australian bank account you'd like to receive your interest payments into. Remember, if you do need to make an early withdrawal, you will be charged fees and lose some of the interest you have earned.
How do I find the best 12 month term deposit for me?
Here's a number of factors to consider when you compare term deposit accounts:
The fixed interest rate
Your interest rate represents the return you'll get for investing your funds. The amount of interest applied to your term deposit will differ between various banks. In some instances the difference is substantial, making this an important feature to consider. Use our term deposit calculator above to see how much of a difference various rates could make to your investment.
Interest payment frequency
With a 12 month term deposit you could choose to have interest earned paid to you monthly, semi-annually or when the account matures.
Few or no fees
You shouldn't be charged any establishment or monthly account-keeping fees on a 12 month term deposit. With the exception of the penalty charge for an early withdrawal, there shouldn't be any other fees applied.
Minimum balance requirement
Term deposits have balance requirements that differ depending on the financial institution. Some only cater to higher deposits of $5,000 or more, while other banks allow for an account with a minimum balance of just $1,000.
What are the advantages and disadvantages of a 12 month term deposit?
- You're not charged a monthly fee. There are no monthly deductions from your savings to cover the cost of maintaining the account. This means your money works harder for you.
- It encourages you to save. You have an extra incentive to keep your savings inside the account by facing penalties for an early withdrawal. It's kind of like forced savings.
- You could get a competitive interest rate. A 12 month term deposit provides you with a competitive interest rate to help build your savings faster. However, remember to compare your options before you commit to any product.
- You can't access the term deposit until it matures. If you needed to withdraw your savings in order to cover an emergency expense, you'll need to give 31 days' notice (though flexibility applies for financial hardship). For this reason as well as the penalty, it is important to carefully decide how much you can afford to have tied up in a term deposit for 12 months.
- There's a minimum balance requirement. You usually need to have a lump sum of $1,000 to start a term deposit. If you don't have this, consider a savings account instead.
Are term deposits safe?
Yes, term deposits are considered a low-risk investment. Personal deposits of up to $250,000 are protected under the Government Guarantee per person, per institution.
What happens to my 12 month term deposit when it reaches maturity?
If you don’t let the bank know of your intent to have the funds released at maturity, it could automatically start it in a new 12 month term deposit account, potentially at a lower interest rate. To avoid this, you must contact the financial institution before the account matures and let them know that you will be withdrawing the money.
Wait, I still have some questions about term deposits
Will I be able to choose when the interest is paid into my account with a 12 month term deposit?
In most cases, yes – with the longer term deposits you are able to choose between monthly, biannual or annual interest payments.
Are there online 12 month term deposits or do I have to visit a branch to set one up?
A large number of financial institutions which operate solely online do offer online term deposits, as do your traditional banks.
Can I have the interest payments made into another account?
Some banks do allow you to have the interest paid into your transaction account with another bank.
The latest in term deposits
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. Read more…
Earn a competitive fixed interest rate when you invest $250,000 or more in a 3 or 6 month term. Read more…
Money invested in the UBank Green Term Deposit supports green energy projects such as solar, wind and marine energy, and low carbon buildings. Read more…
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. Read more…
If you struggle to save, you could benefit from a savings account that won’t allow you to withdraw funds. Read more…
Find out all about the tax treatment of term deposit interest payments. Read more…
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