Long term deposits paying 3.40%, short term deposits 2.85%

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Five-year term deposits are currently paying up to 55 basis points more in interest than six-month term deposits, a new analysis has found.

Rabobank and RaboDirect are offering 3.40 per cent for five-year term deposits (see table below).

That would turn a $5,000 investment into $5,850 at the end of the five-year term.

Greater Bank is offering 3.10 per cent, which would turn $5,000 into $5,775.

Some other lenders are paying 3.00 per cent for five-year term deposits: Australian Unity, G&C Mutual Bank, Heritage Bank, IMB Bank, ME Bank, People’s Choice Credit Union and RACQ Bank.

Five-year term deposits

Lender Interest rate Final total
Rabobank 3.40% $5,850
RaboDirect 3.40% $5,850
Greater Bank 3.10% $5,775
Australian Unity 3.00% $5,750
G&C Mutual Bank 3.00% $5,750
Heritage Bank 3.00% $5,750
IMB Bank 3.00% $5,750
ME Bank 3.00% $5,750
People’s Choice Credit Union 3.00% $5,750
RACQ Bank 3.00% $5,750

If you want to invest $5,000 for just six months, even high-interest term deposits have a ‘2’ in front of them (see table below).

Arab Bank Australia and Bank of Sydney are paying 2.85 per cent for six-month term deposits, which would turn a $5,000 investment into a $5,071.25 payout.

ME Bank is paying 2.80 per cent, which produces a final return of $5,070.

Several lenders are offering six-month term deposit interest rates of 2.75 per cent, including

Rural Bank One, UBank and Firstmac.

MyState Bank is close behind, with an interest rate of 2.70 per cent.

Six-month term deposits

Lender Interest rate Final total
Arab Bank Australia 2.85% $5,071.25
Bank of Sydney 2.85% $5,071.25
ME Bank 2.80% $5,070
Rural Bank One 2.75% $5,068.75
UBank 2.75% $5,068.75
Firstmac 2.75% $5,068.75
MyState Bank 2.70% $5,067.50

Please note that the term deposit with the highest interest rate may not be the best term deposit for every borrower.

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