Terms between 3 months and 5 years
$1000 minimum deposit
0.10% p.a. loyalty bonus when you roll over your term deposit
Term deposit rates are currently at record lows, and unfortunately there's no way to know for sure when they'll increase. We do know that a few things need to happen before banks start to lift their term deposit rates, including:
The main reason term deposit rates are so low is because the official cash rate (which is set by the RBA) is also at a record low. As of December 2021, the cash rate is just 0.10%. This is down from 1.50% in August 2016, which at the time was also a record low.
This has forced banks to lower their home loan rates, which are also at record lows. Because banks are making less money in interest from mortgages with rates so low, they've had to reduce the interest paid out to people with term deposits.
Finder analysis found that term deposits were delivering an average rate of return of 2.45% to Australian savers in early 2017. That was the lowest average return on record since 2002, when the RBA first started collecting this type of data. And compared to rates today, a rate over 2.00% p.a. looks very competitive!
The cash rate is Australia’s benchmark interest rate, so any changes the RBA makes to this figure are commonly passed on to the products offered by Australian banks. So while the current low rates are great news for home loan borrowers, they mean that savers are forced to accept minimal returns on their term deposit investments. This is because, when banks reduce the amount of interest customers need to pay on their home loan, they need to make up for this elsewhere so savings accounts are cut back.
However, it’s worth pointing out that a cut to the cash rate doesn’t necessarily mean lower term deposit rates. Sometimes, banks choose to keep their term deposits rates as they are or, in rare situations, increase their rates. There are several possible reasons behind this move, including:
There are several factors that have an influence on how banks set their term deposit rates in addition to the cash rate, including:
Regardless of the RBA’s official cash rate and average term deposit rates, there are still several things you can do to increase the interest-earning capacity of a term deposit:
Earn a competitive interest rate on terms between 1 month and 2 years with a Challenger 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.
With competitive interest rates and terms ranging from 3 to 24 months, a MOVE Bank Term Deposit can help you reach your financial goals.
Passively watch as your money grows in a high interest earning term deposit from BankVic
A variety of terms to choose from along with interest payment options make the P&N Bank Term Deposits worth a closer look.
Take control of your super with a flexible account that allows you to manage all of your needs in one convenient place.
Give your money the benefit of a high interest savings account boost with a flexible term deposit that allows you to structure the terms to meet your needs.
You can grow your savings quickly and easily by locking them into a term deposit from Rural Bank.
With its relatively low opening balance, IMB’s term deposit could make it easy for Australians to begin making a positive investment towards their financial future.
Bendigo Bank term deposits can give you easy means to save for a short or long term goal. Though, you can find other similar offerings out there, so compare a few before deciding.