The best way to find out if you are getting high term deposit interest is to compare the rate you’ve seen against those from other financial institutions. For example, if you see a rate of five percent for a six month term deposit of $50,000, you might think that’s a high term deposit interest rate.
But when you use a financial comparison website like RateCity, you can compare this rate against those from several other financial institutions. You might find some rates that are substantially higher than five percent. In fact, in April 2011, there were many rates well over six percent for a $50,000 deposit for six months, so in fact the original rate you saw wasn’t high term deposit interest compared to what you can get in the market.
Remember that individual financial institutions won’t tell you what rates you can get from their competitors, so to find out if you’re getting high term deposit interest you will need to do the comparing yourself. As recently as a few years ago, you would have needed to call individual banks to collect that information. Now you can use financial comparison websites, where term deposit accounts will generally be ranked according to interest rate.
One trap you can fall into with term deposits is not checking whether you’re getting high term deposit interest at the end of the term. Many accounts will automatically roll over to a lower interest rate at the end of the term if you don’t do anything, so make sure you compare online a few weeks before the term is over to see if you can get high term deposit interest from another account.
The table below displays some of today’s highest interest rates for 1 year term deposits.