Term Deposit Calculator

When you think about term deposits you may automatically think that they are set and chosen and all you can do is deposit your investment and wait for the end of the term. Well, while you can manage your finances that way, term deposits actually give you a lot of choice, and the choices you make in the comparison stage can help you maximise the interest you will earn at the end of the term.

How you can maximise the interest earned on your term deposit:

• Choose a longer term, as the longer the term the higher the interest rate offered.
• Deposit a larger initial investment as investing more, gives you more funds which will be earning interest, plus larger term deposits can attract higher interest rates.
• Choose the frequency of your returns wisely as this can influence the interest rate you earn.
• Shop around for the best term deposit interest rate as all banks will offer specials and you may be able to take advantage of a higher promotional rate.

Term Deposit	1 Month	3 Month	4 Month	6 Month	12 Month	24 Month	36 Month	60 Month	Min Deposit
St.George Term Deposit	2.55%	3.25%	5.45%	5.20%	5.30%	5.40%	5.70%	6.05%	$5000
UBank Term Deposit	3.36%	5.61%	5.71%	5.91%	5.41%				$1000
Heritage Bank Term Deposit	3.00%	5.60%	3.40%	5.60%	5.50%	5.55%	5.55%	5.80%	$1000

It is important to use a term deposit calculator before choosing your term and term deposit options, as the main benefit of a term deposit is that you know exactly how much you will earn from the beginning. Now all you need to know is how to choose the term deposit options to put into that calculator.

How to Choose a Term Deposit Interest Rate

When you are looking at a term deposit interest rate, you know you will be guaranteed that rate for the entire term of your investment, unlike a high interest savings account you don’t have to worry about external financial pressures impacting on your interest earning capacity. Therefore, the highest interest rate is generally the best as it won’t change on you later, just remember these few points:

• A higher interest rate comes with a longer term deposit so make sure you are comfortable being without the money from your investment for the longer period, if you have to dip into your term deposit early in an emergency, that higher interest rate will be drowned out by cancellation fees and penalties.
• Make sure you are guaranteed the high advertised interest rate you are expecting because some term deposits will attempt to offer a more flexible option to investors, which may also leave the bank free to reduce your interest rate down the track.

Calculating the Return on the Size of Your Term Deposit Investment

The more you invest the more you will get back at the end of the term, for two reasons; the more you invest, the more money there is to be earning interest and so more interest will be earned, and secondly, when you invest larger amounts, banks are willing to do you better deals and offer you higher interest rates.

To calculate a term deposit investment:

• Decide why you are investing in a term deposit. If you are investing for a big return at the end which will allow you to put a deposit on a house or buy a new car then calculate the maximum amount you can do without for the term to maximise your returns. Alternatively if you are investing in a term deposit and intend to reinvest the money at the end of the term you can choose a more conservative amount as you will still be without the funds at the end of the term, as you have longer-term goals.
• Make sure you put together a budget so you know you can manage without your invested funds. You may even choose to set up a secondary savings fund in an online account as your emergency fund so you can be sure you won’t be dipping into your term deposit and being penalised.

How to Compare Term Deposits

To compare term deposit options you need to keep in mind the decisions you have made above, and see which term deposit product will give you the best answers when you make the calculations. A term deposit calculator only allows you to see the impact your investment amount, interest rate and payment frequency will have on your final returns, but make sure you’re not manipulating your finances to allow you a greater return because you could be jeopardising both your term deposit and your everyday financial lifestyle.