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1-year term deposits paying up to 2.90%

1-year term deposits paying up to 2.90%

Challenger banks and credit unions are currently offering some of the highest interest rates in Australia for one-year term deposits.

Investors who want to lock away $5,000 for 12 months can earn 2.90 per cent interest from both Teachers Mutual Bank and UniBank.

At the end of investment period, the $5,000 one-year term deposit would grow to $5,145 (see table below).

Bank Australia is paying 2.85 per cent for its 12-month term deposits, ME Bank is paying 2.80 per cent and G&C Mutual Bank is paying 2.75 per cent.

A $5,000 term deposit could also earn an interest rate of 2.70 per cent from Greater Bank, Heritage Bank, People’s Choice Credit Union, RACQ, Rural Bank and The Mutual.

Australia annual inflation rate is 1.90 per cent, so investors will get a minimal after-inflation return even if they choose a one-year term deposit with the highest interest rate.

LenderInterest rateFinal total
Teachers Mutual Bank2.90%$5,145
UniBank2.90%$5,145
Bank Australia2.85%$5,142.50
ME Bank2.80%$5,140
G&C Mutual Bank2.75%$5,137.50
Greater Bank2.70%$5,135
Heritage Bank2.70%$5,135
People’s Choice Credit Union2.70%$5,135
RACQ2.70%$5,135
Rural Bank2.70%$5,135
The Mutual2.70%$5,135

Please note that the highest-rate one-year term deposit won’t necessarily be the best term deposit for your situation.

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This article was reviewed by Head of Content Leigh Stark before it was published as part of RateCity's Fact Check process.

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