Term Deposit

A term deposit account is just one of many financial products which may suit your lifestyle and savings requirements, but to know for sure whether a term deposit is the best investment option for you, you need to know more about it don’t you? In short a term deposit account locks away your chosen investment amount for a period of time at a guaranteed interest rate. You can choose the amount of your investment, the term and when interest is paid and right here we will show you what to look for when making those decisions.

Features of a Term Deposit

There are some features which are specific to term deposit accounts, and other features and extras which will differ depending on the term deposit provider you choose. Here are a few of the main features you can expect from your term deposit so you know where to start your product comparisons.

Term deposit accounts include:

• A fixed interest rate for the term of the investment. The interest rate you earn on your invested amount is determined by how much you have invested, for how long and how you choose to have your returns paid. However, once all these factors have been taken into consideration and a term deposit interest rate has been calculated, you can feel secure in the knowledge that that interest rate is the one your savings will earn for the entire term.
• No access to your funds during the term. A term deposit account will lock your funds away with your chosen financial provider and you will not be able to make withdrawals or any further deposits until the end of the term. If you do need to withdraw your funds early your interest payments will be penalised, so it is wise to have a separate savings fund for emergencies so you can leave your term deposit investment invested.
• Your choice of terms. While the actual choice of terms will differ depending on the financial institution, you are free to choose the term you would like to invest for and you can generally choose any period of time between one month and five years.
• No fees. A term deposit account should be free to set up and use and once your term has started you should be given online banking log in details so you can view your term deposit in internet banking to avoid the costs of paper statements. There is also often no charge for closing the term deposit account at the end of the term rather than reinvesting and the only time you are likely to be charged bank fees is when you transfer your initial investment into your term deposit account, or if you close your term deposit early.

Who Should Consider a Term Deposit?

Term deposit accounts are now very flexible and offer a range of choices to investors, but they remain a very specific type of investment and you need to be sure a term deposit would suit your saving needs before opening an account. So do you fall into one of the categories of people who suit a term deposit investment?

Term Deposit	1 Month	3 Month	4 Month	6 Month	12 Month	24 Month	36 Month	60 Month	Min Deposit
Suncorp eOptions flexiRates	4.25%	5.50%	5.70%	6.15%	6.35%		7.25%		$0

You may suit a term deposit if:

• You have a lump sum of money to invest. The best term deposit interest rates can be negotiated the more you invest, so to earn the best possible interest rate on your term deposit, you will need to invest the highest amount you can spare.
• You can invest for the long term. Just as you get the best rates on a term deposit with a high balance, you’ll also be able to earn better interest over a longer term. Therefore, a term deposit may suit you if you are able to live without your investment for up to five years.
• You don’t want to manage your investment. All the variables of a term deposit account are determined before the account is opened and once the term begins you can have no more input. Therefore, if you are happy to have an un-managed investment which grow without you needing to be involved, a term deposit may suit you.
• You have another emergency fund and savings account. Since you cannot access a term deposit once it has begun, if you encounter an emergency expense, or want to start saving up for a holiday you will be unable to make deposits to or withdrawals from your term deposit. Therefore, it is best to have a separate emergency fund and a savings account for your short term goals.

If you liked what you saw here and think that a term deposit is an investment option you’d be interested in, then use the Savings Account Finder comparison tables to choose the term deposit with the features to best suit you. You can then follow our secure links to start your term deposit application today.