Long-Term Investment

If you've got some spare cash saved up and aren't looking to spend it now, then a long-term investment strategy may be a great way to turn a small sum into a significant balance.

So rather than leaving the money in a transaction account, where it will earn very little interest, consider one of a number of long-term investment options that may suit your needs such as a long term deposit or high interest savings account.

Both of these long-term investment strategies will likely offer high rates of interest, particularly if you shop around and compare accounts online for a great deal. The added benefit of a term deposit or savings account is that the funds are typically more stable compared with some other long-term investment options such as the share market.

However, money locked in a term deposit is a less liquid asset than stocks, meaning that it can't be withdrawn as cash whenever you may need it, or you'll incur fees for doing so.

When selecting a long-term investment strategy such as a term deposit or savings account, you'll benefit if you do some research and get to know the market before fixing your money. The main things to look out for include:

• High interest rate
• low fees and charges
• the term

That's because selecting the cheapest account with the highest rate can mean hundreds of dollars extra in your pocket down the track.

Other features to look out for when you select a long-term investment include:

• Payment frequency - because if interest is compounded rather than paid at maturity this may mean extra savings on your term deposit account
• Partial withdrawal - whether a customer can access all or part of the funds without being penalised

If it's a term deposit you're considering, then you'll also need to look out for the automatic rollover feature. Rather than have your funds automatically roll into another fixed period, you should reassess the market at maturity and compare term deposit accounts to ensure you're still getting the best deal.

The table below displays some of today's top rates for 2 year term deposits on RateCity.com.au.