Long term deposit rates

Term deposits over one year in length can help you save money and achieve your future financial goals.

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Name Product 12 Mths p.a. 24 Mths p.a. 36 Mths p.a. 48 Mths p.a. 60 Mths p.a. Minimum Opening Deposit
Citibank Term Deposit $10,000
0.50%
-
-
-
-
$10,000
Rabobank Term Deposit
0.75%
0.50%
0.50%
1.05%
1.25%
$1,000
Macquarie Bank Term Deposit
0.55%
0.60%
0.60%
0.60%
0.60%
$5,000
Bank of Queensland Term Deposit ($5,000 - $249,999)
0.50%
0.50%
0.50%
0.50%
-
$5,000
Great Southern Bank Term Deposit Account
0.65%
0.65%
0.65%
0.65%
0.65%
$5,000
Commonwealth Bank Term Deposit
0.25%
0.25%
0.25%
0.25%
0.25%
$5,000
Westpac Term Deposit
0.25%
0.30%
0.30%
0.30%
0.30%
$5,000
ANZ Term Deposit
0.15%
0.15%
0.15%
0.15%
0.15%
$5,000
NAB Term Deposit
0.25%
0.30%
0.30%
0.30%
0.30%
$5,000
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A long term deposit can help you save for future goals, especially if you don't need access to the money in the short term. A long term deposit will hold your money, preventing you from spending it and enabling you to earn a fixed interest rate. Long term deposit rates are often more competitive than shorter terms, as you'll be handing over your cash for longer.

How does a long term deposit work?

Term deposits are a type of savings account where you can bank your money for months or years at a time, without being able to access it. You can choose the amount of time needed when you open the account, ranging from 12 - 60 months. If one year is too long for you to lock away your cash, there are also shorter terms available.

Is a long term deposit right for you?

A long term deposit may be right for you if:

  • You are happy to lock a set amount of cash away for at least one year
  • You're confident you won't need the money before the term length ends
  • You're looking for a low-risk, safe investment option
  • You'd prefer not to invest your deposit in shares, but you still want a small level of return
  • You don't want to have ongoing deposit and savings goals to meet each month (if you do want this, a high interest savings account may suit you better)

How do I compare term deposits?

Your first decision when comparing term deposit accounts is to decide how long you want the term to be. Generally the longer the term, the better the interest rate will be, however this isn't always the case. Once you have an idea of how long you need to meet your savings goal, you should begin comparing available term deposits between the different banks, asking the following questions:

What is the frequency of interest payments?

Long term deposits can offer a range of different methods for receiving your interest, ranging from monthly, quarterly or yearly. Some accounts only pay interest when the account reaches maturity, however if this is the case, you'll lose the benefit of compound interest.

What are the fees?

You should be able to find a number of banks that charge minimal to no fees for their term deposit products. You should carefully research these fees before making your decision, and try to avoid any lenders that charge for early withdrawals (you never know if you will need to withdraw the money in an emergency situation).

What is the interest rate?

This is arguably the most important feature, and one that can differ dramatically between different lenders. Be sure that you are choosing an account with a competitive interest rate by market standards, as this will make a significant difference to your balance over a few years.

What is the minimum balance?

Unlike a savings account, you cannot open a term deposit with only a few hundred dollars. At minimum, you will find accounts that allow an initial deposit of $1,000, but most will expect more. Make sure you're comfortable with the amount required, and that you leave enough money available in your savings account for living expenses and emergencies.

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Any pros and cons to consider for long term deposits?

Pros

  • Flexibility. With a long term term deposit you have control over how long the term is and when the interest payments are applied. This allows you to structure your account in a way that will best suit your saving needs and goals.
  • No fees. You will not be facing monthly deductions from your account for service fees.
  • Incentive to save. Facing penalties is a good incentive for not making an early withdrawal of your savings balance.
  • High interest rate. The longer the term, the better the interest rate will be.

Cons

  • No bonus interest. Unlike many savings accounts, with a term deposit for long term saving there is no bonus interest that you can earn and no introductory offer.
  • Accessibility. This is not an account for keeping as a rainy day fund, as it could take months to access if you needed to use your savings for an unexpected situation. This, along with the penalty charges, makes it difficult to use for an emergency.
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What are the risks?

You will not be risking your savings if your balance is less than $250,000 thanks to the Australian Government guarantee scheme. however, there are things you should avoid to ensure you are getting the most benefit from your long term deposit account:

  • Term deposit roll-over. The bank may roll the account into a new term deposit if you don’t let them know that you will be making your withdrawal at maturity. Before choosing to roll over the account, make sure you shop around and compare other providers rates again, as these may now be more competitive than what you're currently earning.
  • Early withdrawals. If you do make the withdrawal before maturity, not only will you be charged a penalty fee, but the interest calculated will be adjusted to meet the interest you would have received for a shorter term deposit. Don't do it!

Frequently asked questions

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    4 Responses

      Default Gravatar
      GinnyJune 13, 2019

      If I were to set up a trust account for a grandchild would a term deposit be better?

        Default Gravatar
        NikkiJune 14, 2019

        Hi Ginny,

        Thanks for your inquiry.

        It’s great to know that you are looking out for your grandchild. There are 2 types of accounts you can review for your grandchild’s trust account. A savings account and a term deposit. A high-interest savings account offers some of the best interest rates around allowing you to grow your balance as quickly as possible. Some even allow you to earn bonus interest if you satisfy specific conditions, such as depositing a minimum amount into the account each month.

        Meanwhile, term deposits provide the security and consistency of guaranteed returns. These accounts let you lock in a fixed interest rate for a prearranged time period, for example, one or two years. This means you will not be affected by any interest rate drops that occur, but you won’t be able to enjoy the benefits of any rate rises being applied to your deposit.

        As a friendly reminder, review the eligibility criteria and read up on the terms and conditions of the account before committing to the product. Feel free to reach out to the bank if you need any clarifications.

        Best,
        Nikki

      Default Gravatar
      AndyJuly 27, 2017

      If I invest 30000 into a term deposit of say 2 years, am I able to add extra to that before the term is up?

        Avatarfinder Customer Care
        HaroldJuly 28, 2017Staff

        Hi Andy,

        Thank you for your inquiry.

        Few things regarding your concern.

        Generally, the bank may roll the account into a new term deposit if you don’t let them know that you will be making your withdrawal at maturity. Before choosing to roll over the account, make sure you shop around and compare other providers rates again, as these may now be more competitive than what you’re currently earning.

        Cheers,
        Harold

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