If you are a small saver with $1000 and want to put money on a bank term deposit for 12 months there are limited products available. Entry level for investments at most of the major banks starts at $5,000 which cuts out a lot of the small savers.
Term deposits offer you a safe low-risk investment option if you have a longer term savings goal in mind. Terms start anywhere from one month up to five years, with peak interest rates being offered for one year investments.
Because your interest rate is fixed and guaranteed not to change during the nominated term, you are able to calculate the interest earned on your investment. While a 1 year term deposit can be a safe and reliable investment strategy, the disadvantage lies in penalty fees for early withdrawals. So when it comes to choosing an investment term, you need to consider when you'll need to access your funds and what interest rate you want to earn first.
Make sure you have considered other term deposit products and alternative investment options such as high interest savings accounts.
What you'll need to apply:
- A minimum deposit of $1000
- Over 18 years old
- Your Tax File Number (TFN) or TFN Exemption, required by law so your institution can deduct tax from any interest earned
- Another existing account to link to your term deposit
Related Links: Compare best term deposit interest rates, UBank term deposits, Macquarie Bank term deposits