Are you looking for a secure and guaranteed return on your investment? Term deposits are a great option for those looking to save money for the short or long term. They offer a fixed interest rate over a certain period of time, and you can calculate the exact return on your investment. However, it's important to understand the differences between term deposits and savings accounts, as well as the tax implications of investing in a term deposit. In this article, we'll take a look at some of the best term deposit rates offered by Australian banks, as well as the features and benefits of each.For 60 months, AMP Bank offers a term deposit with an interest rate of 4.30% p.a.
Judo Bank's personal term deposit (at maturity) offers 4.00% p.a. for 48 months, while G&C Mutual Bank's term deposit offers 3.70% p.a. for 36 months. Rabobank Australia also offers a term deposit with an interest rate of 3.00% p.a.
for 24 months.Like a term deposit, a savings account also allows you to earn interest on your money. However, unlike a term deposit, you can access the money in your savings account whenever you need it. Generally, you'll need to meet a monthly deposit condition to get the full interest rate on your savings account, which can be a good incentive to continue to increase your balance and increase your savings.Savings account rates have increased rapidly in recent months, and several accounts now offer 3.00% p.a. By comparison, take a look at the 6-month term deposit rates offered by the big four banks:• Commonwealth Bank: 2.50% p.a.• ANZ: 2.50% p.a.• NAB: 2.50% p.a.• Westpac: 2.50% p.a.These are some of the main differences between term deposits and savings accounts:• Accessibility: You can't access your money while it's on a term deposit; if you need to make a withdrawal, you'll have to give at least 31 days notice and you'll be charged a fee for accessing your money before the deadline is over.• Interest rate: The interest rate is fixed on a term deposit; however, it may change on a savings account depending on market conditions.• Taxation: You'll have to pay taxes on the interest you earn from both term deposits and savings accounts.The Reserve Bank of Australia (RBA) cash rate is one of the factors banks consider when setting their interest rates for deposit products.
When banks raise their mortgage rates, they often increase their savings and term deposit rates as well.If your term deposit has reached its maturity, withdraw all funds just like with a regular bank account; however, if your term deposit is still due, your bank will charge you a penalty for withdrawing your funds early.Most banks will require a residential address in Australia to open a term deposit; however, Gateway Bank offers personal term deposits with terms ranging from 3 months to 5 years and competitive interest rates plus additional interest when you transfer your deposit to a new term deposit.Challenger also offers competitive interest rates in terms of 1 month to 2 years with their Challenger Term Deposit; this account is for Queensland residents only.If you're struggling to save, you could benefit from an AMP Term Deposit which won't allow you to withdraw funds; this account offers fixed interest rates for terms ranging from one month to five years.It's important to understand the tax treatment of interest payments on term deposits; since high interest rates are offered under a variety of different conditions, the AMP Term Deposit could be ideal for short- and long-term savings goals.When considering which Australian bank has the best term deposit rates, it's important to compare all available options and consider all features and benefits before making your decision.At Finder we recognize Aboriginal and Torres Strait Islander people as the country's traditional guardians across Australia and their ongoing connection to land, waters and community.
