Term Deposit Rates

As well as locking your investment away where you can’t spend it, a term deposit also helps you save by paying you interest on that investment. However, not all term deposit providers offer the same interest rates for the same terms and a six month term deposit may earn you 6.00% with one bank and only 4.00% with another. Plus the differences in term deposits according to the term you choose can be great, so following is some advice on understanding term deposit rates, and getting the best returns on your investment.

The Choices You Can Make Which Affect Your Term Deposit Rates

Term deposits are not the inflexible investment that they first appear to be. In fact you can choose and vary just about every option of your term deposit account, but the important thing to keep in mind is that these variations will affect the interest rate you can earn.

Term deposit choices:

• The amount of investment. Of course the more you invest in a term deposit, the more money there is to earn interest and so the more interest you will earn. However, if you are able to invest a higher amount in a term deposit you may be able to negotiate a higher interest rate, for example even term deposits over $5,000 can negotiate a better rate, while if you have $10,000, $25,000 or even $100,000 most banks would be happy to offer you a higher term deposit rate.
• The term of the investment. There are different interest rates offered on different terms as the banks want you to invest for the longest possible time, and so will make it worth your while in interest. Therefore, to secure the highest term deposit rates you want to look at investing in the longest possible term, usually five years as this will have the highest interest rate. Also keep in mind that all interest rates listed are per annum rates, so if you are investing in a term deposit for six months and the interest rate is listed as 5.00%, you will actually only be earning 2.50% on your investment because you have only invested for half the year.
• When your returns are paid. For term deposits over 12 months, you can choose when you have your interest returns paid. Often you can choose to be paid returns quarterly, six monthly, yearly or at the end of the entire term. Where the banks try and encourage you to invest for the longest possible time, they also want to encourage you to wait the longest possible time for your returns too, so there are often reduced interest rates offered on term deposit accounts on which returns are paid before the end of the term.
• Pulling out your investment early. This is not a choice you want to make if you can avoid it because you will forfeit a lot of your interest earned and may even be charged cancellation fees for accessing your term deposit investment before the end of the term.

Why You Should Open a Term Deposit Account

With all these factors affecting your term deposit rate, why would you want to open a term deposit account? Because now you know about all the ways your term deposit rates can be affected, you can avoid them and earn the highest returns on your investment.

Term Deposit	1 Month	3 Month	4 Month	6 Month	12 Month	24 Month	36 Month	60 Month	Min Deposit
Macquarie Bank Term Deposit	4.70%	5.60%	5.70%	6.00%	6.00%	6.25%			$10000
Suncorp eOptions flexiRates	4.25%	5.50%	5.70%	6.15%	6.35%		7.25%		$0
Suncorp Everyday Options Sub Account	4.25%	5.50%	5.70%	6.15%	6.35%		7.25%		$0
Suncorp Term Deposit		5.50%	5.45%	5.15%	6.05%		6.75%		$10000
St. George Term Depost			5.40%	7 months – 6.00%	6.00%	6.00%	6.50%	6.75%	$5000

Why you need a term deposit:

• You can make the right choices. You now know all the variables you can choose when opening a term deposit account, and you know the choices which will adversely affect your interest rate and your returns. Therefore, you need to open a term deposit to make the most of this knowledge, and to make the most of a lump sum you have been looking to invest.
• Your investment will be locked away and won’t be spent. If you are saving your investment for a purchase or expense in the longer term then you want to make sure that it is somewhere earning high interest and somewhere you won’t be tempted to spend it. Investing in a term deposit with the best rates means you won’t have access to your funds, but you can be sure they are growing.
• Term deposit rates are guaranteed. Once you have chosen all of your variables to ensure the highest term deposit rate, that rate will be fixed for the life of the term. No matter what else happens in the financial markets you can be sure your investment will continue to earn you a high rate of interest.

For more information about the term deposits which are available, and to see which other features term deposit providers offer which may suit you, use the Savings Account Finder comparison tables to help with your decision making. When you have chosen a term deposit account which suits you, follow our secure links to start the application process today.

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