Term deposits are a great way to save money and earn interest on your savings. They are a type of savings account that you can open for a certain period of time, from one month to five years. The interest rate on a term deposit will generally be determined based on how long you're willing to keep your savings. Banks will usually offer lower interest rates for shorter terms, and higher interest rates for longer terms.
When your original term ends, you can choose to leave your savings where they are and let your deposit be transferred to another term, or you can withdraw your savings and start from scratch.The Commonwealth Bank of Australia (CBA) recently responded to the Reserve Bank of Australia's decision to increase the official cash rate by 0.50% per annum (p.a.). As a result, CBA has increased interest rates on several of its savings products, including some term deposits by up to 0.75% p.a. Other major banks such as ANZ Banking Group, National Australia Bank and Westpac have also followed suit and raised their standard variable rates and certain deposit rates by 0.5 percentage points.If you're looking for certainty about your ongoing mortgage payments, CBA offers a special 4-year fixed rate offer of 4.99% p.a., with a comparison rate of 5.77% p.a., for owner/occupant customers who pay principal and interest with a mortgage loan package. Customers can also use the bank's rate lock feature to help them get any of the fixed-rate offers.When it comes to choosing the right term deposit for you, it's important to compare different options available in the market and make sure that the interest rate offered is the most competitive one.
It's also important to remember that if you make a withdrawal before the term ends, you will be charged a commission and the interest rate paid on your deposit may be adjusted.Peter Marshall has been working in the Australian banking and finance industry for more than 20 years and oversees Mozo's extensive product database. He is regularly sought out by print, radio and television media for his specialized commentary and analysis on banking and interest rate trends.At Mozo, we help thousands of Australians every month choose a bank, energy or insurance provider. We also provide guides on interest rates and insurance products so that customers can make an informed decision about their finances.Finally, CommBank recognizes traditional land owners across Australia as the continuous guardians of the country and culture. We pay our respect to First Nations peoples and their elders, past and present.