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.
