The recent announcement of NAB and ANZ increasing their interest rates on 12-month deposits to 3.00% has sparked speculation that other banks may follow suit. Financial experts believe that, even if interest rates on bank deposits had risen in the past, banks would not be in a rush to raise rates further unless the pace of credit recovers. At present, it may be wise to consider short-term fixed deposits of six to nine months, according to Chetanwala. When your term deposit ends, you can withdraw your cash plus interest or transfer it to a new term deposit at the current fixed rate offered.
If your term deposit is coming to maturity and you are considering renewing it for a new term, you may find that the return on your deposit is higher. The Reserve Bank of Australia (RBA) cash rate is one of the factors that banks consider when setting their interest rates for deposit products. The average four-year term deposit stands at 2.74 percent for four years and 2.79 percent for five years, according to Canstar. 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.
Mr. Leggett suggests that if you have enough money to divide into lots, it would be recommended that you take some of the higher term deposit rates offered for a shorter term (such as six months) and that you take out another term deposit for a longer term term. A quick look at Canstar's data shows that, while the big four offer a maximum term deposit rate of 2.5 percent in 12 months, they average only 1.73 percent. There are several savings account and fixed-term deposit providers that offer competitive interest rates that can help you get a better return on your savings.
In addition, financial advisors warn against opting for weaker banks that tend to offer higher interest rates on deposits.Australia's largest bank, CommBank, initially stated that it would only offer a new, competitive term deposit rate, rather than increasing savings accounts. Here are some frequently asked questions about interest rates on term deposits to help you choose a place to store your hard-earned savings. However, if your term deposit is still due, your bank will charge you a penalty for withdrawing your funds early.In conclusion, there is no doubt that cash rates and, by extension, term deposit rates will increase in the near future, but what is not clear is how much and how quickly. When your term deposit is due, you'll have the option to withdraw your savings so you can start using them again or renewing your term deposit to continue saving.
