Term Deposit Cancellation Fees

A term deposit can be a very profitable investment as it offers you a safe investment and a guaranteed return, while removing all temptation for you to spend your savings while they are working for you. However, term deposits can become very expensive if you need to access your funds before the end of the term, so following is advice on how to avoid term deposit cancellation fees, plus details of the cancellation fees and calculations of Australia’s top term deposit providers.

Featured Term Deposit Account

With a ME Bank Super Members Term Deposit Account you have a low minimum deposit of $1,000, no account keeping fees to pay and a bonus interest of up to 0.25% p.a. for members of eligible industry super funds and unions

• 1 Month: 4.00% p.a.
• 3 Months: 5.70% p.a.
• 4 Months: 5.50% p.a.
• 6 Months: 5.90% p.a.
• 12 Months: 5.55% p.a.
• 24 Months: 5.40% p.a.
• Minimum Deposit Amount: $1,000

Read the ME Bank Super Members Term Deposit Account terms and conditions

How to Avoid Term Deposit Cancellation Fees

You have worked hard to save your money and you don’t want your investment to go backwards, especially when you have invested in a guaranteed term deposit. Therefore, follow these simple steps to help you avoid term deposit cancellation fees:

Choose an investment amount and term you are comfortable with. Take a long and careful look at your finances now and projected into the future to help you decide when you will need access to your investment again, and how much of your savings you can afford to lock away. Knowing you won’t need your funds until the end of the term will help you avoid accessing your term deposit, and attracting cancellation fees.
Make investing easier with regular returns. If you want to invest for a longer term but feel you still need access to the funds, choose a term deposit account which pays your interest monthly, quarterly or six monthly as a way to supplement your income. In this way you will be getting some of your investment back, but won’t be charged cancellation fees.
Have a separate emergency fund. This means that when an unexpected bill arrives or you need funds for a car repair or an impromptu school expense for the kids, you don’t have to dip into your term deposit because you have dedicated emergency funds available, in an account which won’t penalise you for accessing them.

Term Deposit Providers’ Cancellation Fees and Policies

Each Australian term deposit account provider will charge you different cancellation fee if you need your investment before maturity. Some will have a flat cancellation fee while others will only pay you a reduced interest rate.

ANZ:

You can withdraw all or part of your investment before maturity.
You will be charged a $30 fee.
You may also be entitled to a lower interest rate at the discretion of the bank.

Bankwest:

You can withdraw all or part of your investment before maturity.
Your interest earned will be affected according to the amount of your term which has elapsed.
If less than 50% or your term has elapsed your interest rate will be reduced by 2.20%.
If more than 50% but less than 100% of your term has elapsed your interest rate will be reduced by 1.70%.
On terms of 12 months or more where you have been paid returns you may owe money to the bank. That amount may be deducted from the amount of your investment you are having returned to you.
If you are withdrawing only part of your investment, the remaining amount will earn the interest rate applicable for only that amount, not the original total.

HSBC:

You can withdraw all or part of your investment before maturity.
You will be charged a $40 administration fee.
You will receive only half of the interest rate originally applied to your investment.
You will only earn your reduced rate from the date the account is opened until the date you make an early withdrawal, not for the entire original term.
If you have been paid returns, your interest over your elapsed term will be recalculated and your investment payout will be reduced to reflect a 50% reduction in your interest earned for the entire time your account was open.

ING Direct:

You cannot withdraw part of your investment before maturity.
Withdrawing your entire investment before maturity will earn you a reduced interest rate.
Accessing your funds after 30 days, your interest rate will be reduced by 0.25%.
Accessing your funds after 90 days, your interest rate will be reduced by 0.50%.
Accessing your funds after 180 days, your interest rate will be reduced by 1.00%.
You will earn the reduced rate for the entire term of your investment, until your early withdrawal.
For terms longer than one year, you will earn the full interest rate on a full year which has elapsed, and a reduced rate on the year in which you withdraw your funds before maturity. Your interest rate will be reduced by 2.00% for early access, for example a two year term deposit account with an original interest rate of 6.00% which is withdrawn 18 months later will earn 6.00% for the first year, and 4.00% for the remaining six months the account was open.

Macquarie Bank:

It is up to the discretion of the bank whether you can access your investment before maturity.
If you access your investment you will be charged a minimum $100 fee.
If you access your investment during the first third of your term, you will receive only 70% of the interest earned to date.
If you access your investment during the second third of your term, you will receive only 40% of the interest earned to date.
If you access your investment during the final third of your term, you will receive only 20% of the interest earned to date.

Members Equity:

You can only withdraw all of your investment before maturity.
An Early Withdrawal Percentage Rate is calculated by the bank, up to the value of accrued interest at that time.
The reduction in interest charged to you is an estimation by the bank of their costs to meet your early withdrawal needs.

National Australia Bank:

You can withdraw all or part of your investment before maturity.
The bank may offer you a reduced interest rate calculated on the term of your deposit and the estimated costs to the bank of meeting your early withdrawal needs.
If early repayment of your deposit would reduce your investment below $1,000, or below $5,000 for terms of less than 30 days, the bank will repay your entire deposit.
If only part of your investment is withdrawn, the interest on that portion will be paid with the next interest payment date, or at maturity.

Rabobank:

You may only withdraw all of your investment before maturity.
Accessing your funds before maturity is at the discretion of the bank.
You will be charged at a rate which is equal to the cost to the bank to break your investment.
You will also be charged a $25 processing fee.
You will also have to pay the break costs and termination fee if the bank chooses to close your account.

St George Bank:

You can withdraw all or part of your investment before maturity.
You cannot make more than two withdrawals from your term deposit before maturity.
You must withdraw a minimum amount of $2,000 if accessing your account early.
If your term deposit account requires a minimum balance, you cannot make a withdrawal which will drop your investment below this minimum.
St George term deposits have varying grace periods and withdrawals during these periods attract differing cancellation fees and interest rate penalties.
Withdrawing some or all of your investment before maturity may reduce your interest earned.
If you access your funds less than 14 days after your term has begun, no interest will be paid. The original interest rate will be applied to any remaining balance.
Where less than 20% of the term has elapsed, 90% of the interest rate will apply.
Where 20% or more but less than 40% of the term has elapsed, 80% of the interest rate will apply.
Where 40% or more but less than 60% of the term has elapsed, 60% of the interest rate will apply.
Where 60% or more but less than 80% of the term has elapsed, 40% of the interest rate will apply.
Where 80% or more of the term has elapsed, 20% of the interest rate will apply.

Suncorp Bank:

You may only withdraw all of your investment before maturity.
If 25% or less of your term has elapsed, you will earn only 80% of the interest.
If between 26-50% of the term has elapsed, you will earn only 60% of the interest.
If between 51-75% of the term has elapsed, you will earn 40% of the interest.
If between 76-100% of the term has elapsed, you will earn 20% of the interest.

For more information about the interest rates you can earn on the top Australian term deposits, view the Savings Account Finder™ comparison tables here. When you have decided on an investment and term which won’t cause you to break your term deposit early and attract these cancellation fees, you can follow our secure links and start your term deposit application today.