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The benefits of long-term deposits

Kate Wick avatar
Kate Wick
- 2 min read
The benefits of long-term deposits

Term deposits are great for the undisciplined saver because you can lock away your savings for a period of time and you won’t be tempted to withdraw it.

There are short and long-term deposits depending on your needs, the amount of money you wish to invest and how much you want to save over a certain period. Today we are looking at the benefits of longer-term deposits. 

Disclaimer

This article is over two years old, last updated on September 30, 2014. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent term deposits articles.

Long-term investments

Unlike short-term deposits which allow you to invest your money for a short period of time to get a quick (but most likely smaller) return, longer-term deposits will lock your funds away for a longer term from one year up to 10 years.   

Long-term deposits are an appealing savings plan and a common rival to high-interest savings accounts. There is no hard or fast rule when deciding which way you should invest your money so factor in the points below, compare term deposits and high-interest savings accounts, look at the interest rates and keep your eye on the market.

The benefits of long-term deposits

  • Term deposits are fixed-term investments so once you’ve locked in the term you can’t withdraw any funds, which is a great savings tool
  • Long-term deposits are usually less volatile than other types of investments
  • As a general rule, the longer you invest money, the higher the interest rate
  • Some high-interest savings accounts require you to deposit a minimum amount each month in order to earn interest. This isn’t the case for term-deposits so they can be easier to manage.

Give this some thought

While term deposits are a great forced-savings option, you should do some forward-thinking before you put all your money into a term deposit account. When you invest money into a longer-term deposit your money will be tied up for the agreed term duration – which means you cannot touch that money for that period. If you did need to access it for an emergency you may be able to but fees will apply.

Check with your financial institution about what early termination fees they charge should you wish to terminate your agreement.

There are no guarantees when it comes to investing your money, so while longer-term deposits are a great savings option, make sure you conduct your own thorough research before making a final decision.  

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Compare term deposits

$1,000

4.75%

for 3 months

4.80%

for 12 months

  • 3 months
  • Automatic maturity rollover
  • Joint application available
  • Maturity alert by email

$1,000

1.25%

for 1 month

4.90%

for 6 months

  • 1 month
  • Automatic maturity rollover
  • Joint application available
  • Maturity alert by email

$5,000

0.50%

for 1 month

5.10%

for 5 months

  • 1 month
  • Automatic maturity rollover
  • Joint application available
  • Interest payment to other institution

$5,000

4.70%

for 11 months

4.70%

for 11 months

Westpac Banking Corporation Ltd
Term Deposit Special
  • 11 months
  • Automatic maturity rollover
  • Joint application available
  • Maturity alert by phone

$5,000

4.90%

for 11 months

4.90%

for 11 months

Commonwealth Bank of Australia
Special Term Deposit
  • 11 months
  • Automatic maturity rollover
  • Joint application available
  • Maturity alert by email

Product database updated 20 Jun, 2024

Promoted term deposits

Judo Bank Pty Ltd

Personal Term Deposit (At Maturity)

Real Time Rating™

  • 2024 Award Winner
  • 6 months
  • Automatic maturity rollover
  • Joint application available

Interest rate

5.25%

for 6 months

Min deposit

$1,000

Next rate increased

5.25%

for 6 months

Maximum rate

5.25%

for 6 months

Unity Bank Limited

Term Deposits

Real Time Rating™

  • 3 months
  • Automatic maturity rollover
  • Joint application available
  • Maturity alert by email

Interest rate

4.75%

for 3 months

Min deposit

$1,000

Next rate increased

4.80%

for 12 months

Maximum rate

4.80%

for 12 months

Heritage Bank, a trading name of Heritage and People’s Choice Limited

Term Deposit

Real Time Rating™

  • 1 month
  • Automatic maturity rollover
  • Joint application available
  • Maturity alert by email

Interest rate

1.25%

for 1 month

Min deposit

$1,000

Next rate increased

1.50%

for 2 months

Maximum rate

4.90%

for 6 months

MyState Bank Limited

Term Deposit

Real Time Rating™

  • 1 month
  • Automatic maturity rollover
  • Joint application available
  • Interest payment to other institution

Interest rate

0.50%

for 1 month

Min deposit

$5,000

Next rate increased

2.50%

for 3 months

Maximum rate

5.10%

for 5 months

product data updated on

Product data updated on 20 Jun 2024