In some situations, term deposits can be a safe and reliable way to grow wealth over a pre-determined period of time, as they are designed to guarantee you a set rate of interest earnings on your deposit. With a term deposit, the interest rate you receive is locked in at the time you make your deposit.
On the other hand, term deposits can be inflexible, as they don’t always allow you to add extra funds. Your provider may also require you to give a period of notice if you wish to make a withdrawal, which can also attract an early withdrawal fee.
Term deposit interest rates tend to vary a lot between providers and are subject to frequent changes. With movements in both directions possible, it can pay to consider shopping around, but where do you start?
Luckily for would-be term deposit investors, Canstar collects information on term deposit rates from over 60 different institutions.
The following table displays one-year term deposit products on Canstar’s database, available to consumers looking to invest $10,000. The tables are sorted by advertised interest rate (highest to lowest), and then by provider name (alphabetically). To view products based on other terms and investment amounts you can compare term deposits with Canstar. Check upfront with your provider and read the PDS to confirm the details of any particular product and whether it meets your needs before deciding to commit to it.
Compound Interest
Interest earned on an initial amount of money invested as well as on the accumulated interest. Interest can be compounded at different frequencies such as monthly, semi-annually, annually and so on. The compound frequency, the number of compounding periods and the interest rate will determine the amount of interest earned on a term deposit investment.
Of course, term deposits can come with a variety of terms (durations), typically ranging from one month to up to five years. The rate of interest available may vary depending on your chosen term.
What else makes for a good term deposit?
While important, a high interest rate isn’t the only factor to consider when looking for a term deposit. In researching our 2019 Term Deposit Award, Canstar evaluated term deposits based on price as well as features such as:
- The ‘terms’ (length of the term deposit) available
- How easy it is to open and withdraw from
- How and when interest is paid
- The availability of automatic rollovers and any bonuses that apply
You can compare term deposits based on your own financial requirements from a wide range of different institutions using Canstar’s comparison page. You may also want to make sure to read the product disclosure statement (PDS) for your chosen term deposit before making a decision.
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Tamika is a journalist at Canstar. She joined the team after completing a Bachelor of Journalism and Bachelor of Laws (Honours) at QUT, and has past experience writing for a variety of publications across news, music and the arts. At Canstar, Tamika’s writing mainly tackles superannuation and insurance, but she also covers everything from politics to ethical investment to roundups of the latest money-making apps worth downloading. Tamika understands the world of finance can seem daunting at times, so she strives to break it down in a way that is relatable and easy to understand.
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