Term Deposits and Savings Accounts (2023)

What is a time deposit?

Term deposits are a relatively low-risk investment option offered by many Australian banks, investment banks and credit unions. A term deposit allows you to earn interest in one lump sum at a fixed rate for a set period of time. The duration can range from one month to five years. When you put money into a term deposit, you can usually choose to have interest paid to you monthly or when the term deposit matures.

How to find the best fixed deposit for you

To find a term deposit that's right for you, you'll need to compare available interest rates and think carefully about which investment term is right for your financial needs. This is important because early withdrawals from term deposits often come with penalties.

How do fixed deposits compare?

Term Deposits and Savings Accounts (1)

You can use Mozo's chart above to compare term deposits currently available in Australia. This table outlines the most important features you should know before choosing the right term deposit for you.

Here's a quick overview of what's included in the Mozo term deposit comparison chart:

  • thisZinc rateColumn: This lists the interest rates you received during the specified interest period. You'll earn that rate for the entire term of your deposit, unless you need to withdraw early for any reason. In this case, your interest rate may be reduced or some other penalty may apply.

  • thisminimum depositColumn: This is the amount you need to open a fixed deposit account with the listed provider. For term deposits, the minimum deposit varies from $500 to $250,000.

  • thisfixed deposit provider: All fixed deposit providers listed on our website areAustralian Government Deposit Guarantee SchemeUp to $250,000.

Is now a good time to invest in fixed deposits?

In 2022, Mozo will grow rapidly across the boardfixed deposit ratein our database. Interest rates are generally high, and there are several interest rates starting with "3" and "4". Read more about it in the Mozo monthly update above.

As a result of the RBA's recent interest rate hikes, some banks have increased term deposits to keep customers safe. A term deposit is considered one of the safest cash investments for Australians. That's because the interest rate on term deposits is fixed and your money is protected by the Australian Government's Deposit Guarantee Scheme for balances up to $250,000.

Which banks in Australia offer the highest fixed deposit rates?

No single Australian bank can offer the best term deposit rate for every investment period. That's why it's important to compare term deposits based on your unique circumstances. For example, a bank may offer a competitive one-year rate, but the minimum deposit may be more than the amount you need to invest, or your goal may not be that long.

Depending on your location, you may also be able to find better rates by contacting your local bank. It is very important to have the right solution for your needs. Check out the fixed deposit locations below.

sydney terminus

Melbourne Term Deposit

Brisbane Term Deposit

The fixed deposit rate you can get depends on:

Most banks these days give you the option to set up and manage term deposits through online banking or banking apps. This means you can invest from the comfort of your couch!

Important features of term deposits to be aware of

The key features of comparing term deposits include:

  • Zinsrate。The higher the interest rate, the higher your returns should be. The interest rate on a term deposit is fixed, so the rate you set when you start investing remains the same throughout the term regardless of what happens in the market.

  • interest payments.In the case of shorter terms, interest is usually paid on the maturity date, while in the case of longer terms, it is usually paid annually. Some providers may also offer you the option of paying interest on a monthly basis.

  • investment period.You can invest for anywhere from one month to five years, depending on what a particular financial institution offers. Most providers have shorter and longer terms to choose from.

  • minimum depositAll term deposits require a minimum investment amount. Around $1,000 is usually the minimum investment required to open a time deposit account.

  • Automatic extension upon expiration.Your provider should notify you when your term is coming to an end, and will usually provide you with a list of options for what to do when your term is up. This may include collecting your money with interest or putting it into different terms. If you do nothing, your money may automatically roll over to the new term. This may not give you the best interest rate.

Are fixed deposits safe?

All term deposits listed on the Mozo website are protected by the Australian Government's Financial Claims Guarantee Scheme. This system provides protection for deposits of up to $250,000 at an Authorized Depository Institution (ADI), such as B. your bank, investment bank, or credit union, in case the ADI fails.

What are the benefits of a fixed deposit?

Some advantages of fixed deposits are:

  • Eliminate the temptation to dip into your savings and spend, as you won't be able to access your funds for the entire term (unless you request an early withdrawal).

  • Interest rates are fixed for the term you choose, which means they don't fluctuate with market changes.

  • It is a relatively low-risk investment compared to other investments such as stocks and real estate.

  • There are usually no setup or account maintenance fees to worry about.

Term Deposits and Savings Accounts (2)

What are the disadvantages of fixed deposits?

Some disadvantages of fixed deposits are:

  • You do not have easy access to your funds until the term expires.

  • Penalties may apply if you have to withdraw money early. This can take the form of reduced interest rates or fees.

  • During this time, you will not benefit from the rate hike.

Term Deposits and Savings Accounts

Term Deposits and Savings Accounts (3)

It's an old question: Should I put my money in a savings account or a CD? Comparing the two might give you an idea of ​​which one is right for you.

  • This is not possible with time depositsuse your moneyIn a period of time. If you don't think you can, you might be interested in one of theseHigh Interest Savings Accountinstead of this.

  • While savings accounts are usually easy to get,often have a ticketIf you need to withdraw your fixed deposit early. However, it is also good for fixed deposits, as there is less temptation to spend your balance.

  • you can't do itextra paymentDeposit into fixed deposit accounts, while savings accounts can be topped up at any time. Weekly, Daily, Monthly etc.

  • Fixed deposits are term depositsInterest expense, while savings accounts have variable interest rates. This means your bank can lower the interest rate on your savings account a month, a week, or even a day after you deposit your money.

  • Guaranteed returns.With term deposits, you are guaranteed the rate of interest that was set when you first registered for that term. The only way you won't get that rate is if you have to withdraw money early. Because savings accounts have variable interest rates, rates of return are not guaranteed.

view transcript

When is the fixed deposit interest paid?

The amount of interest paid usually depends on the term of the term deposit. For deposits with shorter terms (one month to one year), interest is usually paid at the end of the term. If the term is longer, providers will usually give you the option of paying interest monthly, annually, or on the due date.

Interest is usually paid directly into linked accounts for day-to-day transactions. In some cases, financial institutions will give you the option to pay interest to another bank of your choice.

use mozosFixed Deposit CalculatorEstimate how much interest you could earn over a specific period.

What happens when a fixed deposit matures?

Your bank will contact you to explain your options before your term deposit maturity date. At this point, it's a good idea to shop around and compare the fixed deposit rates offered by other financial institutions and banks.

If your bank doesn't hear from you before your term expires, they may initiate an automatic renewal. With autosweep, the bank transfers your money into a new fixed deposit account with the same fixed term. The interest rate is the current rate offered for that term at the time of rollover. This may be lower than your original interest rate. That's why it's important to note the end date of your deposit.

In general, your options at maturity include the following:

  • Withdraw all money (including interest)

  • Withdraw some of your funds and reinvest the rest

  • Top up your balance with additional funds and fully reinvest

  • Reinvest the same amount in the same period

  • Reinvest the same amount in another installment

Checklist for Opening a Fixed Deposit Account

In most cases, you can open a time deposit account online if you are over 18. Once you set the deadline, you should be able to transfer money directly into it. Here is some information you may wish to have:

  • your name, address and phone number

  • Proof of identification, such as a driver's license and Medicare card

  • your tax file number

  • The details of the bank account you have nominated for the transfer

  • details of any other person who may be named on the term deposit

JP Pelosi

chief editor

Jean-Paul (JP) Pelosi is a senior journalist and editor who has written for many of Australia's leading media outlets, including The Guardian, News.com.au, Domain.com.au, Investment Magazine and ANZ's Bluenotes. He also writes news and disclosures for major financial services companies including CommBank, Suncorp, Allianz and Amex. He loves to tell a good story and apply his editorial experience to content that readers care about and love. JP leads our writing team.

Top Articles
Latest Posts
Article information

Author: Kieth Sipes

Last Updated: 23/05/2023

Views: 6684

Rating: 4.7 / 5 (47 voted)

Reviews: 94% of readers found this page helpful

Author information

Name: Kieth Sipes

Birthday: 2001-04-14

Address: Suite 492 62479 Champlin Loop, South Catrice, MS 57271

Phone: +9663362133320

Job: District Sales Analyst

Hobby: Digital arts, Dance, Ghost hunting, Worldbuilding, Kayaking, Table tennis, 3D printing

Introduction: My name is Kieth Sipes, I am a zany, rich, courageous, powerful, faithful, jolly, excited person who loves writing and wants to share my knowledge and understanding with you.