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Compare Term Deposit Rates

Compare Term Deposit Rates

When looking to compare term deposit rates, it is important to consider some of the highest interest term deposits online, plus the fees and conditions attached to the account.

Term deposit

Depositing your savings into a high interest term deposit with a financial institution may be a great way to make your money work for you. A term deposit is different to a savings account because it restricts you from accessing your money until the fixed term has expired.  On the other hand, locking away your savings in a term deposit account will return you a much higher rate of interest than a transaction account, and often more than most savings accounts. To help get some of the best deals, compare term deposit rates online because they can vary significantly.


Typically, with fixed and long term deposit accounts, there are no establishment fees, setup fees or ongoing fees. That said, breaking your agreement prematurely may incur a hefty penalty charge. Some institutions deduct a percentage off your interest rate, while others may also charge you a break cost. Be sure to read the fine print of all the lenders when you compare term deposit rates to avoid being slugged with a heavy penalty.

Rolling over

Once a term deposit reaches maturity, you can collect the money or you can ‘roll over’ the funds to another fixed term deposit. Whatever you decide, make sure you contact your financial institution before the term expires, because if you don’t, your money may be rolled over into a new term deposit, which may be paying a lower rate of interest. To ensure you compare term deposit rates before term expires, consider putting a date in your diary to ensure you don’t miss the deadline.

Government guarantee

A term deposit is generally viewed as a conservative investment option when compared to trading stock or purchasing property. Backed with a permanent guarantee by the Australian Government (see here for more information), term deposits can provide you with peace of mind when saving long term.

Shop around when looking to compare term deposit rates. It is easy to open an account online and RateCity.com.au has some of the best rates available.

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Learn more about term deposits

Which bank has the best term deposit rates?

If you’ve been shopping around for a term deposit, you might be wondering which bank has the best term deposit rates.

Term deposit rates will generally be affected by the amount you choose to deposit and whether you opt for a short or long term deposit.

Longer term deposits tend to have higher interest rates than shorter terms. The trade-off for earning a higher interest rate on your term deposit is that you can’t access your funds for the duration of the term deposit.

When comparing which bank has the best term deposit rates, it pays to do your research and compare how your funds will fare over the short and long term.

Unlike home loans or savings accounts which give you the option of fixed or variable rates, term deposits are always fixed, which means you get a guaranteed amount of interest over the term of the deposit.

What is a term deposit?

A term deposit is an investment savings account. A term deposit usually pays a higher rate of interest than a regular savings account, with the interest rate fixed for the term (or duration) of the deposit.

You can open a term deposit account for one month or up to five years depending on your investment goal, and invest as little as $500 to start earning a profit.

With a term deposit, you get to decide how much you want to invest (the principal or deposit), for how long (the term or duration) and the frequency of interest payments.

A term deposit represents a secure form of investment, unlike trading in shares or purchasing real estate. And a term deposit up to $250,000 is protected by the government guarantee.

How long is a term deposit?

A term deposit refers to when you lock your money in an account for a certain period of time and at a specified interest rate. You will not be able to access your money for the length of the agreed term without incurring a penalty fee.

A long term deposit generally refers to a term deposit that lasts for more than 12 months – which in some cases may be as long as 10 years.

Usually, the longer you store your money, the better the interest rate you’ll get, so a long term deposit will tend to pay higher interest than a short term deposit.

At the end of the term, you can roll over the money (plus the interest you’ve made during the term), or you can withdraw it all.

How safe is a term deposit?

You may have heard that a term deposit is a type of investment, different to a traditional savings account. All investment comes with inherent risk, so it’s important to know how safe a term deposit is before committing.

Term deposits offer a fixed interest rate which is guaranteed, so you do not have to worry about rising or falling interest rates when investing. You can add up how much interest you will earn over your fixed term, and this will be paid into your account per the conditions of your term deposit.

Term deposits with authorised deposit-taking institutions are also guaranteed for up to $250,000 by the Financial Claims Scheme, so you don’t have to worry about the bank collapsing either.

The only inherent risk of a term deposit is if you may need to break it early. If this happens, you will need to pay a breakage fee and possibly sacrifice some of your interest as a penalty. But if you know you can invest a certain amount of money for a fixed period of time, you can rest assured that a term deposit is a safe investment option.