Illawarra Credit Union
Illawarra Credit Union term deposit interest calculator
Final balance at the end of term would be
at interest rate 0.25 %
Illawarra Credit Union term deposits rates
p.a for 6 months
Next rate increased
p.a for 8 months
p.a for 8 months
Automatic Maturity Rollover
Early Withdrawal Available
Is Covered By Government Gurantee
Joint Application Available
Maturity Alert By Email
Maturity Alert By Phone
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Learn more about term deposits
Are term deposit accounts subject to capital gains tax?
The tax you pay on a profit generated by a term deposit is not classified as capital gains tax (CGT). CGT applies to an asset (or investment), such as real estate or shares, where you either make a capital gain or a capital loss.
Interest earned on a term deposit is considered income though, and would need to be included in your annual income tax return.
The interest can be declared in the year the investment matures, or for the financial year it was credited to your account.
This also applies if you roll over your investment into a new term; you are still required to declare the interest earned at the rollover date (whatever financial year that falls in).
Can you add money to a term deposit?
When you open a term deposit, you agree to lock your money away for a set period and earn a fixed amount of interest during that period.
Where everyday transaction accounts give you the flexibility to deposit and withdraw funds as frequently as you like, term deposits trade flexibility for higher interest rates.
Once your funds are deposited in a term deposit, they’re fixed for the length of the term, meaning you can’t add additional funds midway through the term.
When the term deposit matures, you may have the option to add additional funds and roll the funds over for another term, or you may choose to withdraw the money at that point.
If you have extra funds to invest, you could consider opening an additional short term deposit account or a high-interest savings account.
It’s worth noting that you can withdraw the funds midway through the term, but a penalty is likely to apply.
What rates offered by Citibank on business term deposits?
Citibank’s business term deposits rates vary based on how long you invest. The bank offers short-term deposits for one, three, six, nine, and 12 months. You can also invest for longer terms between two and five years. The minimum investment is $10,000, and the maximum investment is $2 million.
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.
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.
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.
How often do term deposit rates change?
One of the advantages of a term deposit is that this type of investment enjoys a fixed interest rate. This means that the interest rate that you have signed up for will not change during the period of your term deposit, regardless of rising or falling market interest rates.
However, it is important to be aware of the end of your term deposit. Once your term ends, whether this is in three months or three years, many banks will default to rolling over your deposit into a new term, sometimes with a lower interest rate. Once your term deposit rolls over, you will then be locked into this new fixed interest rate for another term.
Make sure to use the grace period at the end of your term to your advantage. Shop around for a competitive interest rate and reinvest your money accordingly.
Are term deposits worth it?
Ultimately, whether term deposits will work for you will depend on your particular financial needs.
Term deposits can be a great way to get your money working for you. By locking it away and forgetting about it for a period of time, it can earn interest for you. If you have the interest paid on a regular basis, rather than at maturity, you can either have some extra spending money or you can reinvest it into the term deposit to compound.
Of course, locking your money in a term deposit means you cannot access it for the length of the term, without paying a penalty for early withdrawal. This can remove the temptation to spend the money, while it also earns interest.
How do you calculate term deposit interest?
If you’re ready to open a term deposit, there’s a lot you’ve already figured out. You’ve decided on the length of your term and found the best interest rate, but there’s something you still might be wondering. How do you calculate term deposit interest?
One of the easiest ways to calculate term deposit interest is by using a term deposits calculator. However, you can also estimate your total earnings on your own.
A fixed interest rate signifies what percentage of your original balance your term deposit will earn annually. For example, a deposit of $1,000 at an interest rate of 3 per cent will earn three per cent of $1,000 annually – meaning you’ll earn $30 of interest each year.
You can estimate your interest using three variables. Multiply together your deposit amount, interest rate, and term length and you’ll approximate the interest a deposit will earn. For example, if you invest in a term deposit for $5,000 at an interest rate of 3 per cent for two years, your interest would total $300.
Are term deposits compounded?
Term deposits can be compounded, depending on what you choose to do with the interest.
There are two ways to receive interest from a term deposit: either a lump sum at maturity; or paid on a regular basis, usually monthly. If you get your interest paid regularly, you can get it paid into a transaction account, or back into the term deposit account. By using this second option, you’re getting interest paid on your interest. In other words, it’s compounding.
Having the money paid into a transaction account means you can access it for your day-to-day spending, while compounding the interest means you get a better overall return on your investment. Both have advantages, depending on your needs, but be aware that some term deposit accounts that pay interest regularly may offer a lower interest rate to offset the effect of compounding.
How do I pay tax on term deposits?
Just like your regular income, the interest you earn on term deposits is taxable. You might be wondering, “How do I pay tax on term deposits?” The tax you pay on your interest will depend on the length of your term and when your interest is paid.
You should pay tax on any interest that you have received within the current financial year. For example, if you receive monthly interest payments, these payments should be claimed on your tax return. However, if your term deposit is longer than one year and you will only receive interest at maturity, then you will pay tax on your interest in the year that you receive it.
Paying tax on your interest is much like paying tax on your income. The money you have made in interest should be claimed on your tax return along with any other income in that year.
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.
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.
What is the best term deposit rate in Australia?
If you’re ready to add a term deposit to your financial strategy, there’s likely one question on your mind: what is the best term deposit rate in Australia?
Unfortunately, there’s no one right answer to this question.
That’s because if you want to find the best term deposit rate in Australia, you first need to understand the nature of interest rates themselves. The financial market is always moving, with interest rates moving up and down and special offers being introduced and withdrawn.
As a result, whatever the best term deposit rate in Australia is today might not be tomorrow.
So to find the best term deposit rate in Australia, it’s best to ignore the past and to instead focus on today’s market. Compare term deposits to find out the current rates and find the right term deposit for you.
What should I know about ING’s business term deposit rates?
ING Direct offers several term deposit options for businesses looking to save over some time.
The business term deposit rates ING offers are compounded annually, meaning that the interest earned after the first year is added to the amount you originally deposited.
During the second year, the interest is calculated on the new amount. If you close the term deposit once it matures, you can ask for the money to be transferred to your business account either with ING or another bank. You can also renew the term deposit and choose to reinvest the total amount earned through the earlier term deposit. Alternatively, you can opt to renew with just the sum you originally deposited, and withdraw the interest earned.
You’ll need to deposit a minimum of $10,000 for at least 90 days if you open a term deposit with ING. In the current low-interest environment*, the annualised interest rate for a 90-day deposit is 0.05 per cent. This means you’d earn $1.25 over a three-month term if you deposit $10,000.
If you opted for a longer time frame, such as two years, you’d get an annualised interest rate of 0.30 per cent on your deposit. If you deposited $10,000, in two years the interest accrued would amount to approximately $60. Again, this is an estimate only based on current rates.
* Rates correct as of January 2021