If you thinking of trying to find a safe, guaranteed investment for your money that even has the potential to create another income stream for you, then a term deposit account from Commonwealth Bank may be right up your ally. Term deposits have the advantage of having an interest rate that is fixed with a range of terms available.
A range of terms are available from CBA, allowing you to lock your funds in at a rate which won't change over the duration of the term.
Features of Commonwealth Bank Term Deposits
Since you need to have as much information as you can before making a decision about any investment, here are some of the key features of a commonwealth bank term deposit:
- Several different terms. Because Commonwealth Bank offer a range of term deposit lengths from as short as thirty days to investments as long as five years. This means that if you in the position to lock your money away for a extended period of time you have the advantage of getting the higher interest rate offered for longer terms. If you need a shorter term, for example, waiting for your house to settle you can choose a three or six month term.
- Choose how you receive interest. Commonwealth bank offers you four different ways to receive your interest payments depending on the term and rate you choose. Interest payments can be paid every four weeks and at maturity, compound interest paid ever four weeks and at maturity. Every six months and at maturity compound interest paid every six months and at maturity. Yearly interest payments can be chosen for terms one year or longer.
- The interest is guaranteed. When you open a term deposit you get to choose the length of the investment and the interest rate that applies. This means once you lock in the term and interest rate it's fixed for the length of investment, so the income gained from interest is guaranteed to you, back by the security of one the big four banks.
- Commonwealth Bank is an Australian institution. Commonwealth bank being one of the big four Australian banks, this means that your money is being looked after by one of the leading banks in Australia. Deposits are also guaranteed by the Australian Government, up to $250,000 per person per institution.
- Minimum deposit of $10,000. If you would like to open a Commonwealth bank term deposit not only will you need the $10,000 minimum deposit but you will also need to be 18 years of age.
To open a commonwealth bank term deposit you will need to:
- Be at least 18 years of age
- Have a minimum deposit of $10,000
Existing customers can open a Commonwealth bank term deposit through NetBank. All you have to do is choose the rate and term open the account and then deposit the money.
Non-Commonwealth Bank customers can still open an account online but they will need to be to provide proof of identity.
Am I penalised if I access my term deposit before it matures?
If your funds are only invested for a portion of the agreed term, the interest rate to date will be adjusted by a certain percentage. Please refer to the table below.
|Percentage of time elapsed in your term deposit||Adjustment to be applied as a % of your interest rate|
|0- less than 20%||90%|
|20 to less than 40%||80%|
|40 to less than 60%||60%|
|60 to less than 80%||40%|
|80 to less than 100%||20%|
For example, for half of the agreed term (50%) then the interest rate will be adjusted by 60%. Hypothetically, if you interest rate was 4%, (4% p.a. x 60%) = 1.60% p.a.