Compare the best term deposits^ in Australia

Compare and calculate interest rates, returns, fees and more. - Data last updated on 18 Aug 2019

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If you’re beginning to think about investing your money, you might be wondering where to start.

Term deposits in Australia can be a beneficial part of your money management and investment strategy.

Who offers term deposits in Australia?

If you’re considering opening a term deposit in Australia, there are plenty of banks and financial institutions to choose from.

Large and small banks, credit unions, mutual banks and building societies offer term deposits to their customers. To get an idea of who offers term deposits in Australia, you can compare deposits and find the one for you.

Are term deposits in Australia insured?

In Australia, the Australian government guarantees term deposits for up to $250,000, under the Financial Claims Scheme. This means that if you have a term deposit with a particular institution and that institution collapses, the government will reimburse you. If your term deposit was, say, $300,000, you would be reimbursed for $250,000 and lose the other $50,000.

It’s important to remember that this guarantee applies per financial institution, which means that some may consider opening term deposits in multiple institutions to ensure their deposits are covered.

To fully understand how your term deposit is guaranteed, it’s best to talk with the financial institution that holds your deposit.

How do I choose the right term deposit?

There are several factors you should consider before choosing an term deposit in Australia. The first of these factors is the interest rate. Your rate is one of the most vital parts of your deposit. You want to find the highest interest rate on the market in order to make the most money in interest.

Secondly, you should consider the payment frequency. The payment frequency refers to how often you’ll be paid interest. If you want a small payout often, you might choose to have interest paid monthly. If you want an out-of-sight, out-of-mind investment, you can wait to collect interest until the end of your term. You should note that, typically, you’ll be offered a better interest rate when you receive your interest less often.

You might also consider the special features of term deposits. Can you be notified of deposit maturity by phone or email? Can you automatically roll over your investment into another deposit to keep making money? Is there an option for early withdrawal? These are questions you might ask to find the Australian term deposit that fits your preferences.

Can I access my term deposit early if I need to?

One of the basic features of a term deposit is that you agree to lend the bank your money for a certain amount of time. In doing so, you agree not to access your money until your term expires.

However, many term deposits in Australia will allow you to access funds before the end of your term, but you’ll usually pay a price. An early withdrawal fee is usually charged as a penalty, and the amount you’ll be charged will depend on the term deposit agreement.

If you suspect you may need to access your deposit early, you should be sure to understand your chosen financial institution’s rules on early withdrawal.

How do I apply for a term deposit in Australia?

Applying for term deposits in Australia is a lot like applying for a bank account. If you’re opening a term deposit with your current bank, it’ll likely be even easier.

When applying for a term deposit, you’ll want to have all of your personal details on hand, such as your address and phone number. You’ll also want some less obvious information on hand, like your driver’s licence number and tax file number. The financial institution will need this information to approve your application.

How do term deposits in Australia compare to other investment options?

Term deposits might be a great choice for your investment strategy, but it’s certainly not your only option. Investments tend to range from low-risk to high-risk, with term deposits being on the low-risk end of the spectrum, along with savings accounts.

Both savings accounts and term deposits earn interest with almost no risk of losing your money. Because the risk is low, the payout is also lower than other types of investments. Simply put, the money you’ll earn from your investment usually corresponds with the risk involved. The higher the risk, the higher the potential rewards.

Another difference between Australian term deposits and other investments is the ability to access and make changes to your investment. With term deposits, your money is locked away for a specific period of time. You’re not able to make additional deposits and you’re typically not allowed to withdraw money early without incurring a penalty fee. With other sorts of investments, such as savings accounts, you can move your money freely at any time.

Many investors choose to use Australian term deposits as only one part of their investment strategy, mixing low- and high-risk options. Others tend to invest in high-risk and high-reward options, and still others might gravitate toward only low-risk investments.

^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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