Don’t waste your time, here are some facts to help you find the best* fixed term deposit rates.
Term deposits generally come with a fixed rate, as you're locking away your funds for a set period of time. Fixed rates are a great way of knowing exactly what the returns are for your investment, so you can plan out your cash flow.
To find the best* interest rate for your term deposit, remember to compare a range of products in the market so you know you're getting a competitive deal. If another financial institution is offering a higher rate than what your existing bank is currently offering, don't be afraid to make the switch.
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Benefits of opening a term deposit
Should your experience with fixed investments be limited, read on to find out why fixed term deposits are a simple, yet effective way to both save money and accrue interest:
- The interest rate is guaranteed for the length of the term.The rate you sign for will be consistent and the same interest rate will be applied every day of your term regardless of market fluctuations and other extraneous factors. The amount you will receive in returns are predetermined.
- Fixed rates take into account inflation.The most competitive rates ensure your investments will keep up with the rising costs of living and inflation. These rates are calculated keeping the future in consideration, ensuring the money invested is aligned or supersedes official rates. Therefore, your return does not depreciate at the end of the term.
- Fixed term deposits are practically hands off investments.A fixed rate is a low maintenance investment. Once you have done the proper research and found the term and rate that is right for you, after you deposit the money, there is very little that needs to be done. Your biggest decision will come towards the end of the term when you have to decide your next move: remove the money from the term deposit, let it roll over to another term or move it to an institution with a more competitive rate.
3 Month or 90 day term deposits
A 90-day term deposit could be ideal for those who have never invested in term deposits before or those that want a quick return on their funds. While the yields are not at high as a longer term, there are still some competitive rates on the market right now.
6 Month or 180 day term deposits
Like a 90-day term, six month term deposits are great for quick returns. Right now, financial institutions are vying for your business and have some outstanding rates on the market. You can sink your funds into a six month term deposit that is comparable to five year term deposit rates.
1 Year or 365 day term deposits
Remember, when it comes to putting your money into longer term deposits, make sure you absolutely won’t need it, since funds cannot be taken with incurring a penalty. Any periods after one year is considered as non-current asset, and is an extended period not to have access to your money.Also, note that most term deposits will have a deposit minimum.
Term deposits for > 1 Year
There's no shortage of long term term deposits either, with some term deposits going for a period of up to five years. While the interest rates are significantly higher, remember that there is a five year term is considered quite long and so there is more time for unfavourable or favourable economics conditions to occur.