While rates on savings accounts have been falling, some term deposit rates are climbing as banks look to encourage customers to lock their savings away for pre-determined periods. Canstar data shows that in June 2018, 13 institutions increased interest rates on their one-year term deposits at an average of 0.21%, while only one lowered rates.
Term deposits can be a safe and reliable way to grow wealth over a pre-determined period of time, as you are virtually guaranteed to earn interest on your deposit. With a term deposit, the interest rate you receive is locked in at the time you make your deposit, which gives greater certainty of returns in a deposit landscape where interest rates are declining.
On the other hand, they can be inflexible, as term deposits don’t always allow you to add extra funds and may require you to provide 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. While a number of providers have boosted term deposit rates recently, Canstar’s data shows a few companies have lowered their term deposit interest rates by as much as 0.7% in 2018 so far. With movements in both directions, it can pay to shop around, but where do you start?
Luckily for would-be term deposit enthusiasts, Canstar collects information on term deposit rates from over 70 different institutions. The tables you see below contain the 10 highest interest rates on term deposits currently listed on Canstar’s website, sorted by the advertised interest rate (highest to lowest) then by provider name (alphabetically). The results shown are for term deposits with interest paid annually, and are for the following terms:
- One year
- Two years
- Three years
- Four years
- Five years
Please note that for each table, the data was pulled as of August 3 2018. It is possible that some of the rates seen in these tables may not still be the same. Please check Canstar’s term deposit tables to view rates that are up to date.
Highest term deposit rates – one year term
| Company | Advertised Rate | Min Term | Max Term | Cooling off period (days) | Interest Paid | Apply Online |
|---|---|---|---|---|---|---|
| Teachers Mutual Bank | 3.00% | 12 months | 12 months | N/A | Annually | No |
| UniBank | 3.00% | 12 months | 12 months | N/A | Annually | No |
| AMP | 2.85% | 12 months | under 24 months | 7 | Annually | No |
| Bank Australia | 2.85% | 12 months | 12 months | 14 | Annually | Yes |
| CUA | 2.85% | 12 months | 12 months | 14 | Annually | Yes |
| Gateway Bank | 2.85% | 12 months | 12 months | 10 | Annually | Yes |
| ING | 2.85% | 12 months | 12 months | 7 | Annually | Yes |
| ME | 2.80% | 12 months | 12 months | 7 | Annually | Yes |
| MyState | 2.80% | 12 months | 12 months | 14 | Annually | Yes |
| G&C Mutual Bank | 2.75% | 12 months | 12 months | 10 | Annually | Yes |
Source: Canstar.
Highest term deposit rates – two year term
| Company | Advertised Rate | Min Term | Max Term | Cooling off period (days) | Interest Paid | Apply Online |
|---|---|---|---|---|---|---|
| CUA | 3.00% | 24 months | 24 months | 14 | Annually | Yes |
| ING | 3.00% | 24 months | 24 months | 7 | Annually | Yes |
| The Mutual | 3.00% | 24 months | 24 months | 7 | Annually | Yes |
| AMP | 2.95% | 24 months | Under 36 months | 7 | Annually | No |
| Bank Australia | 2.95% | 24 months | 24 months | 14 | Annually | Yes |
| Qudos Bank | 2.85% | 24 months | 24 months | N/A | Annually | Yes |
| Bank First | 2.80% | 24 months | 24 months | 5 | Annually | Yes |
| BankVic | 2.80% | 24 months | 24 months | 14 | Annually | Yes |
| G&C Mutual Bank | 2.80% | 24 months | 24 months | 10 | Annually | No |
| ME | 2.80% | 24 months | 24 months | 7 | Annually | Yes |
Source: Canstar.
Highest term deposit rates – three year term
| Company | Advertised Rate | Min Term | Max Term | Cooling off period (days) | Interest Paid | Apply Online |
|---|---|---|---|---|---|---|
| The Mutual | 3.05% | 36 months | 36 months | 7 | Annually | Yes |
| AMP | 3.00% | 36 months | Under 48 months | 7 | Annually | No |
| Bank Australia | 3.00% | 36 months | 36 months | 14 | Annually | Yes |
| Big Sky | 3.00% | 36 months | 36 months | 14 | Annually | Yes |
| Heritage Bank | 3.00% | 36 months | 36 months | 7 | Annually | Yes |
| ME | 3.00% | 36 months | 36 months | 7 | Annually | Yes |
| People’s Choice Credit Union | 3.00% | 36 months | 48 months | 7 | Annually | Yes |
| Qudos Bank | 3.00% | 36 months | 36 months | N/A | Annually | Yes |
| Bank First | 2.90% | 36 months | 36 months | 5 | Annually | Yes |
| BankVic | 2.90% | 36 months | 36 months | 14 | Annually | Yes |
Source: Canstar
Highest term deposit rates – four year term
| Company | Advertised Rate | Min Term | Max Term | Cooling off period (days) | Interest Paid | Apply Online |
|---|---|---|---|---|---|---|
| RaboDirect | 3.30% | 48 months | 48 months | 7 | Annually | Yes |
| Rabobank | 3.30% | 48 months | 48 months | 5 | Annually | Yes |
| AMP | 3.20% | 48 months | Under 60 months | 7 | Annually | No |
| Big Sky | 3.00% | 48 months | 48 months | 14 | Annually | Yes |
| Heritage Bank | 3.00% | 48 months | 48 months | 7 | Annually | Yes |
| ME | 3.00% | 48 months | 48 months | 7 | Annually | Yes |
| People’s Choice Credit Union | 3.00% | 36 months | 48 months | 7 | Annually | Yes |
| People’s Choice Credit Union | 3.00% | 48 months | 60 months | 7 | Annually | Yes |
| Bank First | 2.95% | 48 months | 48 months | 5 | Annually | Yes |
| G&C Mutual Bank | 2.95% | 48 months | 48 months | 10 | Annually | Yes |
Source: Canstar.
Highest term deposit rates – five year term
| Company | Advertised Rate | Min Term | Max Term | Cooling off period (days) | Interest Paid | Apply Online |
|---|---|---|---|---|---|---|
| RaboDirect | 3.50% | 60 months | 60 months | 7 | Annually | Yes |
| Rabobank | 3.50% | 60 months | 60 months | 5 | Annually | Yes |
| AMP | 3.25% | 60 months | 60 months | 7 | Annually | No |
| Bank First | 3.00% | 60 months | 60 months | 5 | Annually | Yes |
| BankVic | 3.00% | 60 months | 60 months | 14 | Annually | Yes |
| Big Sky | 3.00% | 60 months | 60 months | 14 | Annually | Yes |
| G&C Mutual Bank | 3.00% | 60 months | 60 months | 10 | Annually | No |
| Heritage Bank | 3.00% | 60 months | 60 months | 7 | Annually | Yes |
| ME | 3.00% | 60 months | 60 months | 7 | Annually | Yes |
| People’s Choice Credit Union | 3.00% | 60 months | 60 months | 7 | Annually | Yes |
Source: Canstar.
An alternative to term deposits is a savings account. The table below displays a snapshot of savings accounts on Canstar’s database, sorted by the total interest rate (highest-lowest) then by provider name (alphabetically). The results and Star Ratings shown are based on a saver in NSW with savings of $10,000. Source: Canstar.
What else makes a good term deposit?
While important, a high interest rate isn’t the only thing to consider when looking for a term deposit. In researching our 2018 Term Deposit Award, Canstar evaluates term deposits based on the following elements:
- The ‘terms’ (length of the term deposit) available
- Any minimum deposit requirements that exist
- How easy it is to open and withdraw from
- Whether early withdrawals come with penalties or fees
You can compare term deposits based on your own financial requirements from 71 different institutions using Canstar’s comparison page. You should also be sure to read the product discourse statement (PDS) for your chosen term deposit before making a decision.
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