Fix or flex? Term deposits versus savings accounts
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CUA Term Deposits
Term Deposit
specialWhen your term deposit matures, roll over your full deposit amount (or more) for another term and receive a Loyalty Bonus of 0.10% p.a. on top of the current standard interest rate
Since it first opened its doors in 1946 Credit Union Australia (CUA) has remained a 100% Australian and member owned credit union. Today, the organisation has more than 600,000 members and 48 branches Australia wide. CUA endeavours to achieve maximum returns, flexible products and great rates for its shareholders by reinvesting all profits back into its products and services. The credit union is passionate about change and ensuring their members, employees and community have the assistance they need to achieve their lifestyle and financial goals. Their retail banking products include car loans, home loans, personal loans, credit card rewards programs, savings accounts, term deposits and transaction accounts.
CUA t e r m d e p o s i t interest calculator
Thinking about taking out a t e r m d e p o s i t with CUA? Use our term deposit calculator to see how much you can earn under different investment scenarios. You can also see how CUA term deposits compare with other options.
Final balance at the end of term would be
CUA term deposits rates
Now showing 1 - 2 of 2 term deposits
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Product | Interest rate | Min. deposit | Next rate increased | Max rate | Balance Amount | Features | Go to site | |
|---|---|---|---|---|---|---|---|---|
1.65% p.a for 3 months | $5,000 | 1.65% p.a for 3 months | $5k | Automatic Maturity Rollover Early Withdrawal Available Is Covered By Government Gurantee Joint Application Available Maturity Alert By Email Maturity Alert By Phone | More details | |||
1.65% p.a for 12 months | $5,000 | 1.65% p.a for 12 months | $5k | Automatic Maturity Rollover Early Withdrawal Available Is Covered By Government Gurantee Joint Application Available Maturity Alert By Email Maturity Alert By Phone | More details |
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What is a fixed term deposit?
A fixed term deposit is a safe and stable way to earn a fixed return on your cash investment.
Fixed term deposits are essentially bank accounts where you lock your money away for a fixed period and earn a fixed interest rate on those funds.
Fixed term deposits can be both short term, which is usually anything under 12 months, or long term, which can be up to 10 years.
Once the fixed term has ended, the bank or financial institution will give you back your initial deposit plus any interest you earn during the fixed term period.
Depending on the type of fixed term deposit account you open, when the term matures, you may have the option of rolling the funds over for a new term or withdrawing the funds.
Unlike other savings or transaction accounts which offer variable interest rates and flexible features, fixed term deposits offer fixed interest rates, which means the amount of interest you earn will remain the same during the term of the deposit.
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.
Are term deposits covered by the Australian government guarantee?
Yes, term deposits are covered by the Australian government guarantee.
Under the Financial Claims Scheme, the Australian government guarantees term deposits up to $250,000, capped at one person, per financial institution.
This means that your term deposit (if it’s $250,000 or less) is protected in the unlikely event the bank, building society or credit union collapses.
If you have more than $250,000 in a term deposit with one the one bank, for example, then only up to $250,000 of your principal is covered.
If you’ve got more than $250,000 and you wish to invest in a term deposit, you could consider dividing your money between term deposits and banks (limiting each deposit to $250,000 per bank).
That way all of your deposits are protected by the Australian government guarantee and you will not suffer any financial losses.
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.
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.
What is the best interest rate for a fixed term deposit?
The best interest rate for a fixed term deposit changes all the time, as interest rates move up and down and banks compete with each other to win market share.
To find the best interest rate for a fixed term deposit, it’s helpful to understand how interest rates are applied to term deposits.
There are three factors that determine the fixed interest of term deposits:
- The size of your deposit
- The duration of the term
- The frequency of interest paid
Term deposits vary in duration from one month to five years or more. Interest rates generally work on a sliding scale; shorter terms get a lower rate, longer terms get a higher rate.
Here are a couple of examples of how interest is applied to term deposits.
- A $10,000 term deposit taken out over 12 months, with interest paid at maturity, might receive a fixed interest rate of 2.20 per cent.
- A $10,000 fixed term deposit taken out over 12 months, with interest paid quarterly, might receive a fixed interest rate of 2.00 per cent.
Using the size of your deposit, the duration of the term and how often you want to be paid interest, you can shop around for the best interest rate for a fixed term deposit.
Can students make term deposits?
If you are a student who has managed to save some money and are looking for a safe investment option, you may be considering a term deposit. Most term deposits (and other bank accounts) are open to anyone who is at least 18 years old.
There are also some term deposits open to younger students, some even without an age limit. These term deposits are usually opened on the student’s behalf, by their parent or guardian.
A term deposit is generally a safe investment option, especially if you want to make sure you can’t touch your savings for a set period of time. If you are 18 or older, shop around for a competitive interest rate before committing. If you are under 18, speak to your parent or guardian to get started.
How do term deposits work?
Term deposits are flexible, low-risk, and earn you interest over time. But before you apply to open a term deposit, you might be wondering: how do term deposits work?
A term deposit is an agreement you make with a financial institution. This agreement will specify a certain amount of money that you will give the bank for a certain amount of time. In return, you’ll earn a fixed amount of interest on your deposit throughout your term.
Term deposits work as an exchange between a financial institution and an individual. You can think of your term deposit as a loan to the bank. Because you’ve loaned the bank your money, they’re willing to pay you interest on your deposit.
Is a term deposit an asset?
The short answer is yes – a term deposit is, indeed, an asset.
Regardless that the funds are locked away for a fixed period, when it comes to the balance sheet, it’s considered an asset.
Aside from being an asset, term deposits are also cash investments which are held at financial institutions like banks or credit unions.
Term deposits work by investing a set amount of cash in a bank account for a fixed period at a fixed interest rate.
When you deposit your money in a term deposit, you’re agreeing to lock it away for a predetermined period, ranging from short-term periods of one month all the way to long-term periods of up to 10 years.
Term deposits are a popular way to boost your bottom line by investing your money and increasing the value of your asset.