One-Year Term Deposits

Find the best one-year term deposits in Australia and compare interest rates with Savvy.

Last updated on July 1st, 2022 at 04:54 pm by Cate Cook

Compare one-year term deposits

A wide range of financial institutions offer one-year term deposits in Australia, so working out which one offers the very best option for your savings can be difficult.  Start comparing one-year term deposits with Savvy today to make sure you have all the information you need to make the best financial decision.

site-logos Citi Term Deposit
  Maximum Rate Interest Rate Minimum Deposit Government Guarantee  
site-logos 2.25%
1 Year
1.00% $10,000 Yes
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$0 Set up and no ongoing account-keeping fees. Interest rate depends on balance amount. Optional 3,6,9 or 12 month terms. Balances from $10,000.

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More about one-year term deposits in Australia

How do I compare one-year term deposits?

There are many factors to take into consideration when deciding which one-year term deposit is the best one for you. The factors you should look at with one-year term deposits include:

Interest rates

Naturally, the higher the interest rate offered, the better, as this will determine how much interest you earn over 12 months.  The highest possible interest rates tend to be offered by smaller and online-only banks, as well as credit unions and building societies. 

The following chart illustrates how the interest rate offered will affect how much interest you ultimately earn if you have a $20,000 nest-egg to invest for one year with the interest being paid at maturity:

Amount of deposit Interest rate offered Interest earned Additional interest
$20,000
0.80% p.a.
$160
N/A
$20,000
1.00% p.a.
$200
$40
$20,000
1.50% p.a.
$300
$140
$20,000
2.00% p.a.
$400
$240
$20,000
2.50% p.a.
$500
$340
$20,000
3.00% p.a.
$600
$440

As you can see from this chart, the difference between an interest rate of 1.00% p.a. and 2.00% p.a. is $200 over just 12 months.

Interest payment frequency

Banks and other financial institutions offer a range of options as to when your interest is paid to you.  This ranges from monthly, quarterly, half-yearly, right up to annually or at maturity.  Determine which is best for your deposit so you can compare different offers more effectively.

Minimum deposit requirements

Some financial institutions have a minimum deposit requirement in order to take out a one-year term deposit.  This can range from $1,000 to $5,000 or even $10,000 in some cases, so it’s important to compare your options to find an institution who can accommodate your preferred deposit size.

Fees and conditions

Unlike other banking services, establishment or monthly fees aren’t charged on term deposits, so you don’t have to worry about bank fees nibbling away at your savings.

However, if you decide to withdraw your money due to exceptional circumstances before the end of the term you’ve agreed to, you’ll be charged a penalty fee which ranges from $30 up to $50 or more.  You’ll also lose some of the interest you would have earned on your savings. 

The amount you’ll lose will depend on how long your original term agreement was for, and how far into that term you requested withdrawal.  For example, if you were halfway through your term when you decided to ask to withdraw your funds, you may end up losing half of the interest you’d otherwise have earned.  This can be charged up to a maximum of 90% in some cases.

Other conditions can include the requirement to give advance notice if you wish to withdraw your funds early.  This can range from 14 days up to 30, so if you apply to get access to your funds early in an emergency, don’t expect them to be released immediately.

What are the advantages of one-year term deposits?

Some of the advantages of one-year term deposits over longer term deposits up to five years are:

  • they offer a guaranteed rate of return, as the interest offered is for a fixed sum at a fixed interest rate, so you’ll know in advance how much interest you’ll earn
  • they take away any temptation to raid your savings and spend your hard-earned cash
  • you can just ‘set and forget’ your savings for the duration of your deposit and won’t have to make any decisions about your savings until near the end of your 12-month term
  • at the end of your one-year term, you can choose whether to reinvest your savings for another term, withdraw them or transfer them to another bank account
  • a one-year term deposit won’t lock up your savings for too long so you can take advantage of rising interest rates or have access to your funds sooner if you’re unsure of locking them away long-term, such as a five-year term deposit
  • they offer a very safe, low-risk place to stash your savings, as deposits up to $250,000 are covered by the Australian Government’s Financial Claims Scheme, so your savings up to this amount are 100% safe

How can I maximise the interest on my one-year term deposit in Australia?

Here are a few tips on how to increase your interest earnings with a term deposit:

  • Larger deposit

It makes sense that a deposit of $25,000 will earn more interest than one of $15,000, so make the largest short term deposit you’re able to in order to earn the most interest

  • More frequent interest

Try to find a term deposit which offers monthly or quite frequent interest payments and have your interest paid back into your term deposit account, so you end up earning interest on your interest (which is known as compounding interest).  However, some institutions offer a higher interest rate if you choose to have your interest paid only at maturity, so it’s important to weigh up your options.

  • Look past the big banks

Smaller banks and financial institutions which offer online-only access to accounts often provide a slightly higher interest rate for one-year term deposits. Therefore, if you have no need to go into a bank branch, opt for an online-only term deposit to get a higher rate

  • Compare frequently

Compare one-year term deposit rates often and come back to compare with Savvy each time your deposit term is up for renewal

More of your questions about one-year term deposits

What happens if I forget to renew my term deposit at the end of the one-year period?

Your bank or financial institution will send you a reminder before the end of the term, asking what you want to do with your savings once the original term expires.  It will make all reasonable efforts to contact you before the expiration of your deposit term.

If you don’t respond at all, your funds will either be reinvested for the same period, at the same interest rate as before, or they will eventually be transferred to a Commonwealth government fund for lost money and you’ll have to go through an identification process to claim them back.

Do I have to open another bank account to link to my one-year term deposit?

No – you don’t have to have a linked bank account.  Unlike savings accounts, which are often linked to a transaction account with a shared debit card, term deposits don’t have to be linked to any other bank account you may have with the same or another institution. This could enable you to look at institutions you may not have previously considered to find the best high interest term deposit for your savings.

Can kids take out a term deposit?

Yes – some financial institutions have an age limit of 18 years to open an account, but a few financial institutions offer term deposits for kids as young as 13 years of age, so it’s worth comparing providers to find one which will accept a deposit from a child. 

Can I open a one-year term deposit for my business?

Yes – there are separate term deposits for companies and businesses, which come with interest rates which are different to those for personal investors.  In some cases, minimum deposit requirements may be higher for these products, up to as much as $25,000.  As business term deposit offers vary widely, it’s vitally important to compare your options with Savvy to make sure you’re getting the best interest rate available.