It's a good idea to compare interest rates when you are in the market for a term deposit so you can find the option that will maximise your final balance at maturity. In the past that job was tedious, and required the investor to visit numerous websites, sifting through various products to determine rates.
But that is a situation of the past since the establishment of financial comparison sites such as RateCity, which allow you to compare rates on a range of term deposit accounts.
Tips for finding a term deposit
Aside from the interest rate, there are a number of features and fees to consider before locking your money away. Many accounts don’t charge establishment, setup or ongoing fees – but beware of exit fee penalties for breaking a term – although it’s a good idea to confirm this before settling on a term.
Other features to factor in to your decision may include the payment frequency – which refers to when the interest is calculated. This can have a big impact on the final balance, so it’s worth understanding. Another feature is known as auto rollover. As the name suggests, some accounts will automatically roll over into a new fixed term once it reaches maturity – you may need to notify your institution before this time about your intentions.
It can also be a good idea to set a reminder ahead of the maturity date on your term deposit account if you’re considering locking the money in for another term. By doing your research ahead of time and again comparing interest rates you’ll be in a better position to demand some of the most competitive rates on the market – making the return all the sweeter!