Ten-Year Term Deposits

Find out whether you can take out a ten-year term deposit and compare your long-term options with Savvy.

Last updated on July 1st, 2022 at 04:39 pm by Cate Cook

Compare term deposits

Are you looking for a place to deposit your savings for the long term?  You may be thinking that a ten-year term deposit might be the answer.  Find out what Australian financial institutions have to offer in the way of long term deposits and investments and start comparing your options with Savvy today.

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 ten-year term deposits

Are there any ten-year term deposits available in Australia?

No – term deposits are offered for various periods in Australia ranging from one month up to five years, but currently, there are no reputable financial institutions offering term deposits for more than five years.  This is because interest rates change quite frequently and most banks won’t want to take the risk of trying to predict where they’ll be in ten years.

However, five-year term deposits are readily available from many financial institutions including major banks, building societies and credit unions.  Since they involve allowing a financial institution to hold your money for such an extended period (often referred to as a 60-month term deposit), the interest rates on offer for five-year term deposits are generally the highest available amongst deposits.

What are my options for depositing my savings for ten years?

If you do have a lump sum and are looking to invest it for an extended period such as ten years, there are other options available to you.  These include:

  • taking out a five-year term deposit and, at maturity, renewing the investment for a further five-year term. If you choose to do this, you could benefit from a loyalty bonus (often in the region of 0.05% p.a.) which some institutions offer to those who renew their term deposit for a second period
  • depositing your savings into a managed investment fund which specialises in long-term investment strategies. Such funds are offered by many of the major high-street banks and can provide a long-term option to keep your funds safe and earning interest
  • opening a high-interest savings account which offers a very decent rate of interest on the condition that no withdrawals are made. These ‘closed’ savings accounts offer an alternative to long term deposits, without an end date in sight.  Closed savings accounts often have penalties for withdrawing funds, such as forfeiting interest earned for that month, so it’s worth comparing them with Savvy to make sure you choose the best fund for your savings
  • investing in property, shares or other avenues of investment. Even though many of these investments aren’t as safe and secure as term deposits, they do offer viable alternatives which can result in long-term wealth accumulation. Often, these avenues provide the possibility of a far greater return on investment than term deposits
  • instead of investing your funds, using them to pay down any debt you have or to pay a lump off your mortgage. You may be better off getting rid of a chunk of your home loan rather than depositing your savings to earn additional interest, depending on what interest rate you’re paying on your home loan at present
  • leaving your savings in an offset account, where they won’t earn interest but will offset the interest charged on your home loan on a dollar-for-dollar basis, resulting in less interest being paid overall.  You can use Savvy’s home loan offset calculator to find out if this may be a better option for your savings

Are savings accounts or term deposits better over the long term?

Both types of accounts have their advantages and disadvantages, although term deposits in general offer a higher rate of interest than savings accounts do. The main advantages of term deposits are:

  • they have a fixed rate of interest, so you know exactly how much your investment will earn over the long term. You can use Savvy’s term deposit calculator to make your calculations simpler
  • there’s a much higher chance of you reaching your savings goals since your funds are locked up and unavailable to easily withdraw, away from any temptation to withdraw and spend your funds
  • if you reinvest the interest earned back into the term deposit account (which many financial institutions allow you to do), you can benefit from the effects of compounding, which means earning interest on the interest and so growing your nest-egg faster
  • deposits with licenced banks and financial institutions (ADIs) up to $250,000 are guaranteed by the Australian Government’s Financial Claims Scheme, so even in the unlikely event that an institution folds, your savings are still safe

However, some of the primary drawbacks of investing in a long term deposit include:

  • in the event of a genuine emergency, you could be unable to access your cash for up to 30 days, which could leave you short in a time of high need
  • by locking in your interest, you could miss out on rate hikes which could see you earn even more on your savings
  • you can only invest a set amount in a term deposit and can’t add to it as you earn more money, so the only way the principal figure will grow is if you add the interest earned back into your deposit account
  • you do have to manage your deposit and remember to take action when your term is nearly up. If you forget about your deposit, it could end up in another bank account reserved for lost or forgotten funds

Savings accounts have the advantage of enabling you to add additional funds into them as each payday rolls by and providing ongoing access to your funds at a moment’s notice if necessary.  In addition, you don’t have to worry about a savings account running out, or forgetting to renew it, as they can remain open indefinitely, meaning they can help you store your savings for ten years or more. 

More of your questions about term deposits

How old do you have to be to open a term deposit?

Some financial institutions have a minimum age limit of 18 years, whilst others allow children as young as 13 to open a term deposit.  However, there are no term deposits designed especially for kids, as children don’t tend to have large sums of money to stash away.

Can two people open a long term deposit together?

Yes – term deposits are available for couples who wish to invest their joint funds together, as well as for trusts which have multiple trustees and businesses which have more than one company director. Most shared deposits have one primary account holder who has the ultimate authority to make decisions about opening and closing the account.

Do all term deposits have a fixed interest rate?

Yes – all term deposits have a fixed interest rate and a fixed term for the deposit, after which the funds either have to be transferred elsewhere or possibly reinvested in another deposit or savings account.  However, there are long-term savings accounts which have a variable interest rate, so those may be a better option for you if you wish to avoid locking in your rate. 

What is the minimum amount I need for a term deposit?

All financial institutions have their own minimum and maximum deposit caps and limits.  For short term deposits, the minimum is often $1,000, rising to $5,000.  For medium to long-term deposits, the minimum often starts at $5,000 and can go up to $25,000 or more, depending on the nature of the product offered.  Ask your bank or financial institution for details about their minimum limits and compare your options with Savvy.