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The best term deposits for July 2020

Alex Ritchie avatar
Alex Ritchie
- 4 min read
The best term deposits for July 2020

In the last few months interest rates for savers have been slashed left and right. So, is it time to lock away your savings with a term deposit at a rate that won’t fall any further?

If you’re one of the many Australians using a term deposit as opposed to a savings account to grow your nest egg, you may be wondering if it’s worth still sticking with a term deposit, and how you can still get a good return on your balance.

There are still some competitive term deposit options out there, if you know where to look, and many still have its advantages over savings accounts.

Interest rates on the chopping block

When it comes to squirreling away your savings and waiting for it to grow, most people are stuck between choosing from a term deposit or a savings account.

However, if you’re only looking at the rate of return, you may find the same, low interest rate story across both term deposits and savings accounts.

RateCity data shows that between 1 June and 13 July, the average 1-, 3- and 5-year term deposit rates have continued to fall, despite no cuts to the Reserve Bank of Australia’s cash rate since March.

Average term deposit rate difference – 1 June to 13 July

Deposit term

Average rate

1 June

Average rate

13 July

1 year




3 years




5 years




Source: RateCity.com.au. Note: rates based on deposit of $10k, data accurate as at 13 July.

For savings accounts it’s a similar story, with rate cuts resulting in the highest rates now sitting just above the 1 per cent mark. If you’re looking for high returns in a savings account, you may find yourself in the same low-rate situation as term deposits. So, which do you choose?

Out-of-cycle rate cuts hurting savers

RateCity research has found that since May, 93 providers have cut rates to their term deposits.

However, RateCity research also shows that since May, while 58 savings account providers have made cuts to their rates, and 35 have done so more than once.

Meaning that in the last few months, if you choose to put your money into a savings account, you would likely have experienced one, if not more, interest rate cuts.

Whereas, the savers who locked away an interest rate on their term deposit in May would still be on that same rate today.

Are term deposits still a good saving tool?

If you’ve always relied on term deposits, there may be no harm in sticking with this model of savings growth.

The benefit of a term deposit is that you are locking away your savings at a set rate that cannot change for a fixed period of time. Unlike a savings account which, as per the above, may be cut at any given time, and more than once, over the next few months.

If you’re the type of person who enjoys the stability of locking away your nest egg and fixing an interest rate that cannot be changed by the bank, a term deposit may still be a competitive savings tool for you.

So, how do you find the most competitive term deposit rates? RateCity has done the research for you and awarded the top term deposits for 1-, 3- and 5-year terms with a Gold Award.

Best 12-month term deposits

You never know what the market may look like in a year, so perhaps you’re interested in a shorter-term deposit. These are the highest ranking 12-month term deposits that have been awarded a RateCity Gold Award.

Best 3-year term deposits

Hoping to lock down a competitive rate for a few years? These are the highest ranking 3-year term deposits that have been awarded a RateCity Gold Award.

Best 5-year term deposits

The highest term deposit rates may often be reserved for the longest terms. If you’re looking to secure your nest egg for as long as possible, here are the highest ranking 5-year term deposits that have been awarded a RateCity Gold Award.


This article is over two years old, last updated on July 15, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent term deposits articles.

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Product database updated 19 Apr, 2024

This article was reviewed by Finance Writer Alison Cheung before it was published as part of RateCity's Fact Check process.