Long term deposit rates
Some term deposits offer better interest rates for longer term lengths, but you'll need to be willing to lock your money away for 3, 4 or even 5 years.
Compare other products
How we picked these
Finder Score for term deposits
Finder Score assigns Term Deposit products a score out of 10, comparing interest rates and features, to make comparison easier. We assess over 150 products from more than 90 providers, assessing products across different terms to determine an average score per product.
Key takeaways
- A long term deposit locks in a fixed rate for your whole term, so your return won't change even if interest rates move up or down later.
- Longer terms often offer higher fixed rates but restrict access and mean missing out on potential rate rises.
- Minimum deposits typically start at $1,000; larger investments may qualify for special rates directly from banks.
How does a long term deposit work?
Depending what you consider to be a long time, a long term deposit can be anywhere from 12 months to 5 years. Generally, 5 years is the maximum amount of time most banks will let you lock your money into a term deposit.
You'd need to lock your money away for the length of time that you select, and you'll earn a fixed interest rate on your investment that will be locked in too. Some banks offer better fixed rates on longer terms, but this isn't always the case.
Is a long-term deposit right for you?
Longer-term deposit lengths often offer more competitive rates than terms of less than 12 months, but it could also be more of an inconvenience to lock your money away for more time. It could be a good option for you if you know you won't need money in the short term.
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 want a set-and-forget investment
- 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're okay with this, a high -interest savings account may suit you better)
Is it a good time to open a long term deposit?
As at August 2026, the RBA cash rate is 4.35%, having risen from 3.85% in February 2026 to 4.10% in March and 4.35% in May, then held at the June and August meetings. With the cash rate elevated rather than falling, term deposit rates aren't currently trending down, so there's no rush based on rate direction alone, though locking in a competitive fixed rate can still suit you if you want certainty over your return for the term.
Pros and cons of long-term deposits
Pros
- Choice of interest payments. You can choose to get paid interest annually or in one lump sum at the end of your term.
- No fees. You will not be charged monthly account-keeping fees with a term deposit.
- Incentive to save. Facing penalties for withdrawing your money early is a good incentive to keep your money invested in the term deposit.
- Higher interest rate. Usually the longer the term, the better the fixed interest rate will be.
- Fixed interest rate. Even if the interest rate is reduced by the bank, you'll still earn the fixed rate that you got when you first opened the account (even if it's for another 4-5 years!).
- Set-and-forget investment. You don't need to meet any monthly deposit requirements like you do with a bonus savings account, and you don't need to be keeping an eye on share prices like you do when you buy shares online.
Cons
- No bonus interest. Unlike savings accounts, with a term deposit, there is no bonus interest that you can earn and no introductory offer.
- Can't access the money. 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 or unexpected expense.
- Miss out on rate rises. Because the rate is fixed, if the bank increases its term deposit rates you will be stuck on the initial rate until the term reaches maturity.
How to compare long term deposits
What is the interest rate?
This is arguably the most important feature, and one that can differ dramatically between different lenders. The higher the rate, the more interest you'll earn over the life of your term.
How often is interest paid?
Long term deposits can offer different methods for receiving your interest, ranging from monthly, quarterly or yearly. Some accounts only pay interest when the account reaches maturity.
What are the fees?
Most term deposits have no account fees, but you should 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 are the balance limits?
At minimum you will find accounts that allow an initial deposit of just $1,000, but most will expect more. Make sure you're comfortable with the amount required, and leave enough money available in your savings account for living expenses and emergencies.
Similarly, if you've got a large amount to invest, look for a term deposit that allows for large deposits (some are capped at $20,000, for example).
Best long term deposit rates
Some of the best long term deposit rates at the moment include:
- 5.3% for 5 years with RaboBank
- 5.5% for 5 years with Judo Bank
- 5.2% for 5 years with Unity Bank
Frequently asked questions
Why you can trust our banking experts
Obsessed with great rates - We nerd out over RBA decisions and monitor the market daily to make sure you get the best interest rates from banks big, small and digital (and the odd credit union).
Cash in your own time frame - over 140 term deposit options tracked against 8 time frames from 3 months to 5 years. Dig into the data, or get the quick and easy editorial "best" if you're in a hurry.
No BS - We don't have a call centre, we're not owned by a bank. Heck, you don't even need to give us your email. Our job is to get your money to work harder and let that sweet interest grow.
More resources on Finder
Ask a question
8 Responses
More guides on Finder
-
Compare term deposit rates from the Big Four banks
Compare term deposit rates from Australia's Big Four banks and see if you can find a better rate with a smaller bank.
-
Heartland Bank Term Deposit
Earn a competitive interest rate on terms between 1 month and 5 years with a Heartland Bank term deposit.
-
Locked savings accounts
If you struggle to save, you could benefit from a savings account that won’t allow you to withdraw funds.
-
Term deposit accounts for kids
Your guide to finding the best term deposit accounts for kids, allowing your children to enjoy the security of guaranteed returns on the money they invest.
-
People First Bank Term Investment
Set your own terms and conditions for how your money grows with a flexible investment account that rewards you with higher interest earnings.
-
Term deposit calculator
With the help of a term deposit calculator you get a better idea of how much you need and for how long to invest so you can meet your financial goals.
-
ME Go term deposit
With the ME term deposit you get a flexible savings plan with options that let you customise the terms to suit your needs.
-
Term deposit rates for $100,000+ balances
If you need a safe place to tuck your savings of away and yield a profit, a $100,000 term deposit could provide a solution.
-
Notice Savers: A mix between a savings account and term deposit
The added level of control coupled with the high interest earning potential of notice savers makes this a savings account worth considering. Ensure that you understand exactly how it works, and if it will fit in with your financial goals before making a final decision.
Hi, I am looking to open a term deposit account with my partner but we are residents yet, we are on 494 visa. Do you know of any banks that accept temporary residents?
Thanks
Hi Natalia,
With term deposits and bank accounts, banks don’t require citizenship or permanent residency usually. For example, you can get a term deposit with the Commonwealth Bank as long as you have a tax file number and a residential address.
Most banks will probably be the same. It’s different with loans and credit cards because you’re the one borrowing money, and there’s a risk assessment involved. But with a term deposit you’re trusting your money to the bank, so it’s a different story.
What is the highest interest rate for $250000?
Hi Bob,
The rate would depend on which term length you’re looking for. Looking at 12 month terms as an example, some of the top rates are 4.70% with The Mac Credit Union, 4.65% with G&C Mutual or 4.65% with Unity Bank.
For large deposits over $250,000 you can also speak to the bank directly to see if they’ve got any special rates on offer.
Thanks,
Alison
If I were to set up a trust account for a grandchild would a term deposit be better?
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
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?
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