12 Month Term Deposit Rates

To invest in a 12 month term deposit you have to be sure you can allocate your investment funds to your term deposit for the entire time, because a lot can happen in a year and you don’t want to have to draw on your term deposit in an emergency because the penalties to your interest rate, and potential cancellation fees will be high. However, there are plenty of benefits to a 12 month term deposit account if you find the best one for your circumstances:

12 Month Term Deposit Comparison

Term Deposit	1 Month	3 Month	4 Month	6 Month	12 Month	24 Month	36 Month	60 Month	Min Deposit
RaboDirect Term Deposit	4.00%	5.10%	5.10%	5.40%	5.45%	5.10%	5.30%	6.00%	$1000
St.George Term Deposit	2.55%	3.25%	5.05%	5.05%	5.05%	5.10%	5.20%	5.50%	$5000
UBank Term Deposits (online)	3.36%	5.21%	5.21%	5.61%	5.41%				$1000

Top Term Deposit Rates

• The interest rate offered on 12 month term deposits is higher than that offered on three, six or nine month terms, and generally much, much higher than the interest you can earn in an online savings account.
• Your interest rate is locked in for 12 months and where shares, property and high interest savings accounts can fluctuate a lot over the course of a year, your term deposit will not.
• You’re not tempted to spend your investment because it is locked away.
• A 12 month term deposit allows you to genuinely earn the specified interest rate.

How To Choose a 12 Month Term Deposit

Choosing to open a 12 month term deposit is a big decision so you want to make sure that you are choosing the term deposit account which is best for you and your needs now, and in 12 months time.

Could You Use a 12 Month Term Deposit Account?

A 12 month term deposit account is not for everyone, but if you have long term savings goals, or you just want to put away some of your savings in a guaranteed investment plan then you may want to compare term deposit accounts.

How you could use a 12 month term deposit:

• As a reward or investment for your son or daughter. Perhaps your child is going into year 12 next year and you want to make sure you have a special reward for them when all the hard work is over, you could invest a couple of thousand dollars in a 12 month term deposit and by the time your son or daughter has finished school they could have money for a new car, a moving-out-of-home fund or they could choose to rollover the term deposit and keep saving for their studies, their house or their travel plans.
• Are you planning to make the leap to small business owner? If you have been thinking about leaving your everyday job and starting up your own business to pursue a dream and career which really interests you, you have to be prepared. Therefore, while you spend the next year researching tax information, making contacts and getting to know your market, a 12 month term deposit could also be working away too. Then, when you are ready to make the leap you have a healthy investment waiting for you to help you on your way.

The Real Difference of a 12 Month Term Deposit is in the Interest Rate

While a 12 month term deposit will offer you a higher interest rate from the beginning, it is how the interest rate is calculated on term deposits less than 12 months which makes the difference in your returns over a longer period. A 12 month term deposit has a set interest rate and if for example that rate is 6.00%, you know that at the end of 12 months, your $5,000 investment will have earned 6.00% interest, and therefore be $5,300.

However, on term deposits less than 12 months, the interest rate is not calculated in the same way. For example, on a six month term deposit with an interest rate of 5.50%, you will not be earning 5.50% interest on your investment, you will only be earning six months worth of 5.50%. This is because the interest rates stated on term deposits less than 12 months are the per annum rate. Therefore, on a six month term deposit with a 5.50% interest rate, at maturity you will have $5,138 because you have earned half the per annum interest rate, 2.75% on your investment.

Making a commitment to a 12 month fixed investment can be scary because a lot can happen in a year. However, with a 12 month term deposit you can be prepared for whatever happens, and even take advantage of it before it happens with the best 12 month term deposit rate. To abate your fears about a 12 month term deposit, find out more about how to compare the best 12 month term deposit rates, and how to decide if you really are suited to this long term investment.

How to Compare 12 Month Term Deposit Rates

Are You Suited to a 12 Month Term Deposit Investment?

A 12 month term deposit investment is a long term financial decision and you need to be sure that you are making the right choice, before you make it. If you open a 12 month term deposit rate and lock in your investment at a fixed interest rate, you need to be able to live without your investment amount for the entire term, if you do need to access the funds in your term deposit account before maturity, you can incur early access fees and an interest rate penalty, making your investment less worthwhile. To decide whether you are suited to a 12 month term deposit account:

• Budget for your investment amount. Look closely at your budget for the next 12 months to make sure that you can live without your term deposit funds. Make sure you have enough in a savings account for emergencies, and ensure you can keep budgeting to make contributions to that savings account to cover emergencies now and into the future, especially if there is more than one emergency and you need to restock your emergency funds.
• Do you have a long term savings goal? Perhaps you are saving for a house, a wedding or planning for a baby, and so you know you won’t need access to your term deposit funds for quite awhile. This makes a 12 month term deposit investment a good choice because your savings are locked away where you can’t spend them on impulse purchases, and your savings continue to grow as you approach your long term savings goal.
• Are you happy to let your funds grow without you for 12 months? A 12 month term deposit does not need your input again until you decide what to do with it at maturity. Therefore, you need to make sure you are happy to be uninvolved in your investments for that entire time. There is no need to check the progress of your returns because they are progressing at the guaranteed rate, and you won’t have the opportunity to make any decisions about changing your investment options or amounts because your 12 month term deposit account is fixed. Therefore, if you are the kind of investor who wants a long term hands off approach, a 12 month term deposit account could be for you.