Fact checked
Even if you only have a short time to park your savings, finding the best term deposit rate is still important to maximise the interest you’ll earn. There’s a huge difference between the highest and lowest interest rates available in Australia for short term savings, so comparing products is a must.
Savvy offers free and comprehensive term deposit comparison information so you can decide which financial institution is right for you. Find the best deal for your money by comparing with Savvy today.
Rabobank 1 Year Term Deposit |
|||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|||||||||||||||||
Start with as little as $1,000 and get your interest paid monthly, quarterly, half-yearly or yearly. Receive a 0.10% loyalty bonus when you automatically reinvest your Term Deposit before maturityMore details |
|||||||||||||||||
|
|||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|||||||||||||||||
$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.More details |
|||||||||||||||||
Disclaimer: Savvy is not advising or recommending any particular product to you. We provide general information on products for the purposes of comparison, but your personal situation or goals are not considered here. Although we try to make our comparisons as thorough as possible, we do not have information on all products on the market on our site.
You should always consult a given offer's PDS or further documentation in the process of deciding on which loan to choose, as well as seeking independent, professional advice. If you decide to apply with one of the lenders listed above via our website, you will not be dealing with Savvy; any applications or enquiries will be conducted directly with the lender offering that product.
Getting the best interest rate for your short term deposit depends on several factors:
Look at the smaller financial institutions
In general, you’ll find the best short term deposit rates are offered by the smaller banks and online financial institutions. This is because they’re under less pressure to make profits for their shareholders, unlike bigger banks. Therefore, the best place to find great interest rates is usually with smaller institutions and those who only operate online.
Increase your deposit size
The more money you have invested, the more interest you’ll earn and the faster your savings will grow. Institutions also typically offer higher rates for larger deposits. Therefore, it makes sense to lock away as large a chunk of your savings as you can comfortably afford.
Choose a longer deposit term
The longer the term you’re prepared to lock away your savings for, the higher the interest rate you’ll be able to achieve. For example, if you’re able to deposit your savings for six months instead of three months, you’ll be able to increase the interest rate offered from 0.55% p.a. to 2.00% p.a. from one financial institution (as of June 2022). This means if you had $20,000 to put into a term deposit, you’d earn $100 for the six months, rather than $28 for three months, which is more than double the interest earned.
Compare as many deposits as you can
Interest rates, terms and interest payment frequency vary so much between institutions that it’s important to compare as many term deposits and providers as possible to make sure you’re getting the best deal.
These are the factors you should compare when it comes time to choose your short term deposit:
1. Interest rate
Naturally, the higher your interest rate, the more interest you’ll earn. Even the slightest increase in the interest percentage figure can make a big difference to how much interest you’ll earn, even if your deposit is for a short length of time, as this chart illustrates:
| Size of deposit | Term of deposit | Interest rate | Interest earned |
|---|---|---|---|
|
$15,000 |
Three months |
0.25% p.a. |
$9 |
|
$15,000 |
Three months |
1.00% p.a. |
$38 |
|
$15,000 |
Three months |
1.50% p.a. |
$56 |
|
$15,000 |
Three months |
1.75% p.a. |
$66 |
|
$15,000 |
Three months |
2.20% p.a. |
$83 |
*For this illustration, interest is assumed to be paid at maturity.
2. Term of deposit
Term deposits are offered from as little as one month up to a maximum of five years. Short term deposits are regarded as those which are for one year or less, so they’re measured either in days or months. Make sure the institution you pick provides the term that you’re after, as not all banks offer all lengths of time to deposit your funds.
When considering term deposit offers between institutions, always make sure you’re comparing apples with apples by using the same term investment length. For example, compare three-month term deposits only with other three-month deposits to ensure your comparison is valid. Keep checking back with Savvy so you can compare and find the best offers available to you.
3. Minimum and maximum deposits
Some providers have a minimum deposit requirement of $1,000, whilst others set their minimum at $5,000 or even $10,000. Check that the provider you choose has a minimum deposit level that you’re comfortable with.
The maximum amount you’re able to deposit also varies between financial institutions, ranging from $250,000 for some short term deposits up to $2 million or more.
4. Interest frequency
You can choose whether to have your interest paid monthly or less often, such as quarterly, annually, or at the maturity of your deposit. You can also choose whether to have your interest paid back into your term deposit account or whether to have it credited to another account. Some short term deposits of 12 months or under may only offer the option of being paid your interest at the maturity of your term.
You may be offered a higher interest rate if you choose to have your interest paid less often, but you won’t benefit from the effects of compounding. This means you won’t end up earning ‘interest on interest’ like you would if you get the interest paid back into the same account.
5. Other terms and conditions
There are no ongoing maintenance fees on term deposits. However, fees will apply if you wish to access your funds prior to your deposit’s maturity, so it’s worth checking out the following factors:
Currently, the best short-term deposit rates are offered by AMP Bank, MyState Bank, Judo Bank, MyLife Finance, Macquarie Bank, Rabobank, Bank of Sydney and ME Bank, to name a few. In June 2022, for a $5,000 term deposit, interest rate examples include:
Three-month term:
Macquarie Bank 1.25% p.a., Bank of Sydney 1.25% p.a., JudoBank 1.15%
Six-month term:
AMP Bank 2.10% p.a., Rabobank 2.00% p.a., MyLife Finance 1.95% p.a.
12-month term:
Judo Bank 3.15% p.a., ME Bank 2.75% p.a., MyState Bank 2.50% p.a.
You won't have to pay a cent to compare term deposits with us, with free comparisons available 24/7.
There's no need for you to worry about visiting any banks, as you can compare term deposits and open one online.
We're partnered with trusted financial institutions around Australia to help you choose the best option with confidence.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
