Spend more, save now: Secrets to scoring big at Christmas

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Want to grow your money before Christmas to help make your gift shopping a little easier? RateCity has some handy term deposit tips to make sure you're prepared for this year's spending rush.

July 7, 2010

Without intending to frighten you, there is now less than six months till the start of the festive season. We all know how fast the first half of this year has gone by and how quickly the second half can sneak up on us.

So with that in mind, if you have already started to think about buying presents (especially during sale time or have started saving for when the man in red arrives) here is an idea that might put something extra in your Christmas stocking.

Regardless of how organised you are (or aren't), have you considered the option of keeping the money you plan to spend on presents in a term deposit account?
Short-term deposits are a great, safe and easy way to invest your money and earn a higher rate of interest than what you can earn with your everyday transaction account.

For example, if you were to deposit $2000 into a term deposit for five months you could receive an interest rate of 5 percent per annum (RateCity's current best rate by Arab Bank, as at July 5) and earn yourself $50 in interest if paid on maturity. That is equivalent to a few movie tickets for someone's Christmas stocking or a massage during your Christmas shopping session.

If you compare this rate of 5 percent to the current average term deposit rate for five months, which is 2.90 percent per annum, you will earn $29 in interest, or $21 less than the best rate five-month term deposit on RateCity. By comparing term deposits online you will be able to find a term deposit that offers a high interest rate from some of the best deals in town so you can grow your Christmas savings faster.

Or if you don't want to tuck your money away for five months, why not look at a shorter term of, let's say three months. You can earn 5.45 percent (RateCity's current best rate by Gateway Credit Union as at July 6) on a three-month term deposit with a balance of $2000, for instance. That could earn you $27 in interest or a great cookbook gift in December.

The more money you have to invest into a term deposit the more interest you can earn, so every little bit counts and will help you out when it comes to your gift shopping this Christmas.


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