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If you have a stash of cash that you don’t need to access every day, you can use the RateCity term deposit calculator to work out how much you could earn by putting that money in a term deposit account. 

If you’re working towards a savings goal, like a first home loan deposit or a holiday, a term deposit calculator can help you work out how much interest you could add to your savings, and how quickly.

How do I use a term deposit calculator?

To get a more accurate idea of how much you can earn by investing in a term deposit, use the free RateCity term deposit calculator like so: 

  1. Fill in your initial deposit amount
  2. Fill in how long you intend to invest your money
  3. Add the potential interest rate on the term deposit.

This will show you how much money you could earn in interest on your savings, so you can compare these results with term deposits from different banks and other financial institutions. 

Keep in mind that the best term deposit for you will depend on your specific financial situation and personal objectives. 

We recommend using the term deposit calculator to compare a few different scenarios, so you can see how much you could potentially earn by investing your savings in different term deposits.

How to find the best term deposit interest rates on RateCity

After you’ve used the Term Deposit Calculator to get an idea of how much interest you could potentially earn from a term deposit, you can navigate to one of RateCity’s term deposit comparison tables to see what else is available.

Enter the minimum term length and minimum deposit you’re looking for to narrow down your selection. If you aren’t seeing many options, use the Filters to select to see all term deposit products.

If a high interest rate is a priority for you, you can sort the table by the Maximum Interest Rate. Just keep in mind that to qualify for this maximum rate, you may need a different deposit amount or term length than you originally planned. Other options include sorting by the minimum deposit or the base interest rate.

What is a term deposit?

A term deposit is a type of investment where you place your savings in an account for a fixed length of time. Over this term, the bank will pay you interest at a fixed rate on the amount you invest.

Term deposits are often considered relatively low-risk investments, and could be useful if you’re looking to add an extra boost to your savings. As you’re essentially locking your money away for a set period, banks will usually offer higher interest rates on term deposits than on regular savings accounts. 

Term deposit interest rates are fixed, and are not variable rates. Whatever the interest rate is on the day you join is what it will be for the full deposit term. And unlike a savings account or other banking products, it's unlikely you'd be able to get bonus interest from a term deposit. 

The catch is that you can’t easily withdraw your funds while they’re locked into a term deposit. You may need to provide advance notice (31 days' notice is common), pay a fee, or receive less interest to withdraw money early from a term deposit. Unlike locking your nest egg away in a savings account, you cannot just withdraw your term deposit funds from an ATM, for example. 

For example, if you were to deposit $5,000 into a three-month short-term deposit, you wouldn’t be able to use those funds until the term deposit matures after three months.

At the end of the three-month term, you’d get the initial $5,000 back, as well as any interest you earned on your deposit during the term.

The amount of money you can make by depositing your savings will depend on the term deposit rate, the term length, and the amount of money you deposit.

For example, here are the calculated final balances for different starting deposits and term lengths, assuming an interest rate of 2.25 per cent:

 3 months6 months 9 months 12 months 
$5,000 term deposit $5,028$5,056$5,084$5,113
$10,000 term deposit$10,056$10,113$10,169$10,225
$20,000 term deposit$20,113$20,225$20,338$20,450
$50,000 term deposit$50,281$50,563$50,844$51,125

Term deposit features

As well as using the calculator to estimate how much interest you could earn, there are other term deposit features to think about before making a choice, including:

  • Interest payment frequency: Is your interest paid monthly, quarterly, semi-annually, annually or on maturity? Your final balance at the end of the term can vary depending on the frequency that interest is calculated, and whether the payments can be added to your deposit to earn compound interest.
  • Nominal and effective interest rates: The nominal rate is the advertised term deposit interest rate, whereas the effective rate is the potential interest rate including the compounding effect of payment frequency based on a 12-month term. The more frequent your interest payments, the higher the effective rate relative to the nominal rate, as regular interest payments are either compounded into the term deposit or can be reinvested elsewhere. Read a term deposit's product disclosure statement for more information around rates and fees.
  • Early withdrawal: Whether you just needed a little more in your nest egg for a home loan deposit, you want to pay off a personal loan or a car loan, or are looking to chip away at some credit card debt, you may find you need to withdraw your funds a little early. Keep in mind that this will typically carry moderate to high fees.
  • Other fees and costs: Some term deposit providers may charge you ongoing fees, such as account keeping fees. If you're looking to keep ongoing costs down, it pays to do your research and compare a range of term deposits before applying.

Types of term deposits

When it comes to investing your money in a term deposit in Australia, you have two main options – short term deposits and long term deposits.

Short term deposits range anywhere from 30 days (one month) all the way up to 12 months (one year). While short term deposits may not earn as much interest as long term deposits due to their shorter investment term, one upside is that you don’t have to lock your cash away for as long. This means that short term deposits are often suited to savers looking for a short-term boost.

If you’re looking for a set-and-forget investment that steadily grows over a longer period, you may want to look at long term deposits. Usually offered for periods of 12 months to five years, long term deposits can help you steadily earn interest and grow your savings. As an incentive to lock your savings away for a longer period, the bank or lender will usually offer higher interest rates on long term deposits.

Long term deposits can offer a degree of stability, as well as earn you more total interest due to longer investment terms. One potential downside of long term deposits is that you may miss out on earning extra interest if rates were to rise, as you'd remain locked into its fixed interest rate.

Some banks also offer the option of a rollover term deposit. This gives you the option of rolling your money over for another fixed term when your term deposit matures. Before you roll over, it’s important to check to see that the rate is still competitive and suitable for your needs.

Withdrawing your money from a term deposit before the maturation date can come with hefty penalties, so before you apply, weigh up the risks and rewards of short and long term deposits. Also, think about your spending and saving habits. If you’re likely to continue saving and adding to your account regularly, you may also want to consider high-interest savings accounts. If you're unsure whether a term deposit is the right fit for you, consider reaching out for some financial advice from a financial adviser.

Popular term deposits lenders

Frequently asked questions

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.

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.

What is a term deposit rate?

The term deposit rate is the agreed interest rate for your term deposit. It remains fixed for the term of the deposit.

For example, if you deposit $5,000 for 12 months at a 2.5 per cent term deposit rate, that 2.5 per cent term deposit rate will be fixed for the entire 12 months and won’t change until the term matures.

The term deposit rate is one of the most important factors to consider when comparing your term deposit options. The general rule of thumb is that the longer the term, the higher the term deposit rate.

Term deposits are a popular type of investment because they’re safe and provide reliable returns.

The return you get on your term deposit will be determined by the amount you initially invest, the amount of time you choose to invest it for, and the term deposit rate.

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.