If you want to earn high interest rates for a term deposit, you might have to lock away a lot of money for a long time.
A RateCity analysis of the May 2019 term deposit market has found that even the most generous five-year term deposits in Australia are paying low interest rates.
And to earn those rates, you might have to invest a sizeable sum.
G&C Mutual Bank is paying 3.00 per cent for five-year term deposits, with the minimum investment set at $1,000.
Australian Unity and IMB Bank are also paying 3.00 per cent, but have a $5,000 minimum.
Bank First, BankVic and RaboBank are paying 3.00 per cent with a $50,000 minimum.
| Lender | Interest rate | Minimum deposit |
|---|---|---|
| G&C Mutual Bank | 3.00% | $1,000 |
| Australian Unity | 3.00% | $5,000 |
| IMB Bank | 3.00% | $5,000 |
| Bank First | 3.00% | $50,000 |
| BankVic | 3.00% | $50,000 |
| RaboBank | 3.00% | $50,000 |
Mutual banks paying some of the highest interest rates
A range of other challenger lenders are paying between 2.80 per cent and 2.95 per cent for five-year term deposits, with minimum investments ranging from $1,000 to $250,000.
Police Bank is paying 2.95 per cent, while Greater Bank and QBank are paying 2.90 per cent.
RACQ Bank, People’s Choice Credit Union, Newcastle Permanent and Beyond Bank are all offering investors 2.80 per cent for five-year term deposits.
| Lender | Interest rate | Minimum deposit |
|---|---|---|
| Police Bank | 2.95% | $10,000 |
| Greater Bank | 2.90% | $5,000 |
| QBank | 2.90% | $250,000 |
| RACQ Bank | 2.80% | $1,000 |
| People’s Choice Credit Union | 2.80% | $5,000 |
| Newcastle Permanent | 2.80% | $10,000 |
| Beyond Bank | 2.80% | $200,000 |
NAB the market leader among the major banks
If you’re with one of Australia’s big four banks, and you don’t want to take your business elsewhere, you’ll have to accept lower five-year term deposit interest rates.
NAB is paying 2.50 per cent, ANZ 2.45 per cent, Westpac 2.40 per cent and Commonwealth Bank 2.20 per cent.
| Lender | Interest rate | Minimum deposit |
|---|---|---|
| NAB | 2.50% | $5,000 |
| ANZ | 2.45% | $5,000 |
| Westpac | 2.40% | $5,000 |
| Commonwealth Bank | 2.20% | $50,000 |
