Smaller lenders beating big banks on three-year term deposits

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Investors who want to put $10,000 in a three-year term deposit may want to skip the big four banks, which are not paying the highest interest rates in Australia.

NAB pays the highest interest rate among the big four banks for three-year term deposits, at 2.70 per cent (see table below). That results in a $10,810 payout at the end of the investment.

ANZ and Westpac both pay 2.50 per cent for three-year term deposits, turning an initial $10,000 investment into $10,750.

Commonwealth Bank offers 2.40 per cent interest, resulting in a final total of $10,720.

Lender Interest rate Final total
NAB 2.70% $10,810
ANZ 2.50% $10,750
Westpac 2.50% $10,750
Commonwealth Bank 2.40% $10,720

Customer-owned lenders paying 3% and above

There are a range of smaller lenders that are paying higher interest rates than the big four banks on $10,000 sums invested in three-year term deposits.

Horizon Credit Union is paying 3.10 per cent for three-year term deposits, which turns $10,000 into $10,930 (see table below).

Greater Bank is just behind at 3.05 per cent, which equates to a $10,915 payout.

At least eight other lenders pay 3.00 per cent interest for three-year term deposits – Bank Australia, Big Sky Building Society, ME Bank, People’s Choice Credit Union, Qudos Bank, Teachers Mutual Bank, The Mutual and Unibank.

Lender Interest rate Final total
Horizon Credit Union 3.10% $10,930
Greater Bank 3.05% $10,915
Bank Australia 3.00% $10,900
Big Sky Building Society 3.00% $10,900
ME Bank 3.00% $10,900
People’s Choice Credit Union 3.00% $10,900
Qudos Bank 3.00% $10,900
Teachers Mutual Bank 3.00% $10,900
The Mutual 3.00% $10,900
Unibank 3.00% $10,900

^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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