Here's how much you could earn in a 12-month term deposit at the current highest rates

The cash rate is on the rise, and with it comes higher interest rates on savings products. Savers around Australia have been rejoicing over term deposit rates finally leaving the pits of near-zero interest. 

With many term deposits now offering rates starting with a ‘4’, you may be wondering how much you could earn by locking away your funds on a fixed term rate. RateCity has crunched the numbers on a $20,000 balance to determine how much you could earn in a 12-month term on the current highest rates on our database.

Term Deposit

• 3 months
• Automatic maturity rollover
• Joint application available

This RateCity Award winner was one of the top-rated 12-month term deposits of 2020.

Interest rate

4.75%

for 3 months

Min deposit

$25,000

More details

Featured AMP Bank terms and conditions

Highest 12-month term deposit rates - $20,000 balance

At the time of writing, these are the top interest rates on the RateCity database for 12-month terms for a $20,000 deposit.

1. Judo Bank - 4.10%
2. Macquarie Bank - 4.10%
3. AMP Bank - 4.05%
4. Peoples Choice - 4.00%
5. St.George/BOM/BankSA - 3.90%

So, what does that mean in terms of an actual return? If you locked away a nest egg of $20,000 into a 12-month term deposit on the highest rate, at maturity you will have earned $820 in interest.

Source:RateCity Term Deposit Calculator. Data accurate as of 28/10/22

The fall and rise of term deposits

Following a decade of cuts to the cash rate, the latest increases to interest rates in Australia have breathed new life into term deposits. 

The big four banks have significantly increased their term deposit rates following several consecutive months of RBA cash rate hikes. RateCity research shows that the big four banks’ highest term deposit rates were only between 0.20-0.30% before the RBA hikes began in May. Now, the highest rates offered by the big four banks for term deposits are as high as 3.50-4.10%

This is a difference of between 3.30-3.70 percentage points. This is significant when you consider that the cash rate has only been hiked to 2.60%.

Three of the four big four banks are now competing with term deposit market leaders following October’s cash rate hike. CBA, Westpac and NAB are offering a term deposit rate at or above 4%.

Note: Data accurate as of 10/10/22

Sally Tindall, RateCity research director, said: “With mortgage funding costs rising, deposits are becoming an increasingly important part of the funding mix for banks.”

“If you’re going to lock up your money in a term deposit, make sure you get a competitive deal. The cash rate is still on the rise, so your term deposit rate should reflect this,” she said.

Compare term deposits

Provider

Real Time Rating™Min depositInterest rateMaximum rate

$1,000

5.10%

for 6 months

5.10%

for 6 months

More details

Product info

Personal Term Deposit (At Maturity)

• 2024 Award Winner
• 6 months
• Automatic maturity rollover
• Joint application available
• Maturity alert by email

$1,000

4.75%

for 3 months

4.80%

for 12 months

More details

Product info

Term Deposits

• 3 months
• Automatic maturity rollover
• Joint application available
• Maturity alert by email

$1,000

4.90%

for 3 months

5.15%

for 6 months

More details

Product info

Term Deposits

• 3 months
• Automatic maturity rollover
• Joint application available
• Maturity alert by email

$5,000

0.50%

for 1 month

5.00%

for 7 months

More details

Product info

Term Deposit

• 1 month
• Automatic maturity rollover
• Joint application available
• Interest payment to other institution

$5,000

4.70%

for 11 months

4.70%

for 11 months

Product info

Term Deposit Special

• 11 months
• Automatic maturity rollover
• Joint application available
• Maturity alert by phone

$5,000

4.75%

for 12 months

4.75%

for 12 months

Product info

Special Term Deposit

• 12 months
• Automatic maturity rollover
• Joint application available
• Maturity alert by email

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