Best Deposit Interest Rate

A term deposit’s best rate is determined by a number of factors, some you can control and some you can’t, others which you don’t want to. Finding the best deposit interest rate is about a careful combination of comparisons, shopping around and making the choices which best suit you, and we’re going to show you how to strike the perfect balance and get the best term deposit rate no matter what.

Featured Term Deposit Rates

Term Deposit	1 Month	3 Month	4 Month	6 Month	12 Month	24 Month	36 Month	60 Month	Min Deposit
UBank Term Deposit	3.36%	5.61%	5.71%	5.91%	5.41%				$1000
St.George Term Deposit	2.55%	3.25%	5.45%	5.20%	5.30%	5.40%	5.70%	6.05%	$5000

How the Best Term Deposit Interest Rates are Calculated

Where a term deposit rate is somewhat out of your control, is in the bank’s assessment of your investment. A term deposit provider will make an interest rate calculation based on the choices you make for your investment account, based on some of the following criteria:

• The term of your investment. The longer you choose to invest for, the more easily you’ll find a high term deposit interest rate as the highest rates are usually offered on the longest terms. This is for two reasons: one, the banks want to encourage you to invest your money with them, so they can make their own investments on the money market, and so they lend it out to their mortgage and loan customers, both of these reasons help the bank keep running ad turning a profit; two, a longer term interest rate is higher in comparison to the shorter terms because it is calculated to take into account future rate rises so your investment can grow in line with inflation, in this case, think about whether the rate for a long term investment really is high, or is actually just a natural progression of inflation, on the rate rise cycle.
• The amount of the investment. Many term deposit providers offer a tiered interest rate calculation, where the larger your investment amount, the more interest you will earn. This is to again, encourage deposits so the banks can remain profitable, and for helping add to their deposit funds, you will be rewarded.
• Interest return payments. For terms longer than 12 months, you can often choose to have your interest paid monthly, quarterly, six monthly or yearly, as well as retain the choice of interest at maturity. However, if you choose to have your interest paid during your term, you can be earning a lower interest rate overall, than if you waited.

How to Secure the Best Term Deposit Rates

So it would seem that in an ideal world, your investment would be the largest, for the longest and with interest paid at maturity, earning you the best interest rate. However, while all these are factors which make up some of the best term deposit rates, the truly best interest rates are also determined by:

• Your investment and saving needs. If you invest all the spare cash you have, for the longest five year term available without doing a proper budget for your investment then you are not getting the truly best rate. This is because when you make an investment you can’t afford, chances are you’ll need access to your funds before the end of the term and this incurs cancellation fees and an interest rate penalty, dropping it far below any of the best rates.
• Your savings goal. The reason for opening a term deposit account will determine how much you can invest, and for how long. If you want to keep your house deposit funds safe for a few months until the settlement of your loan, the best term deposit rate is on a two or three month investment, if you want to grow an investment for your newborn child’s education, then choosing the longest term for your child’s future will secure you the best rate.
• Shopping around can turn up each bank’s best rate. The term deposit provider with the highest interest rate on a six month term, will not necessarily have the highest interest rate on a two year term deposit. This is because all banks are individuals and all run their businesses differently, each having bumper months of profits or times when they need to encourage new customers. Therefore, it is important to determine the term you are looking to invest for, before comparing term deposit interest rates. You can then shop around for the provider offering the best rate on your terms, as each bank will have their own specials and their own promotions at different times, all you have to do is take advantage.

To find out which terms and investments are on special now, and which term deposit provider is offering a promotion on your desired term, view the Savings Account Finder™ comparison tables here. You can then follow our secure links directly to an online application form for your chosen term deposit, to lock in your rate today.