If you typically look to the real estate market for investment opportunities and are keen to broaden your options, then a term deposit account may be worth considering.
Long term deposit rates are often competitive with other types of investments such as residential property. In fact in early 2011 average yield for 12-month term deposits on a balance of both $50,000 and $100,000 outpaced the average investment property yield by at least 1.2 percent.
A long term deposit rate differs to a short term deposit rate. Long term deposits may be any term from 12 months up to about five years and long term deposit rates will vary slightly between the different terms.
Alternatively you can opt for a shorter term deposit, which may be as short as 30, 60 or 90 days, for instance.
If you're interested in a fixing a lump sum, then compare long term deposit rates at comparison websites such as RateCity. By doing so, you'll likely find an investment term that suits your financial situation.
Of course the decision to invest in real estate or a term deposit is more complex than calculating yield, what with tax benefits, liquidity and long-term investment strategies to take into consideration.
Advantages of a term deposit
One of the advantages of a term deposit is the relatively low risk it presents to the investor. So there is little to no chance that you'll lose money with this type of investment.
Another benefit of term deposits is that they institutions usually offer relatively high rates of interest, so good that they have even been known to outpace the average dividend yield of Australian equities in the past.
Before you fix your lump sum, compare long term deposit rates online so you get the best deal for your situation.