Best Short Term Deposit Rates

Find out more about how to lock in the best short term deposit rates with Savvy

Last updated on June 29th, 2022 at 05:31 pm by Cate Cook

Compare short term deposit rates

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.

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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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.

More about short term deposit rates

How can I get the best short term deposit rate?

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, such as a 0.05% p.a. or 0.10% p.a. increase for deposits above $25,000 or $50,000.  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% p.a. from one financial institution.  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.

How should I compare short term deposits?

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:

  • how much notice you’ll need to give if you wish to withdraw your funds early (this ranges between 14 days and 30 days)
  • what early exit penalties are charged if you wish to break your term deposit (such as a set penalty fee of between $30 and up to $50 or more will be charged)
  • if there’s a loss of interest if you need to access your funds early. The loss of interest is usually a percentage, often dependent on the length of time of your original deposit and how early into this term you wish to break your contract (for example, if you break your contract halfway through your term, you may be penalised 50% of the interest you would have earned)

Where can I find the best short-term deposit rates today?

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, current interest rate examples are:

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.

More of your questions about the best short term deposit rates

Is a short term deposit my best option?

At present, shorter-term investments may be the best option. This is because, with the Reserve Bank of Australia raising interest rates for the first time in 11 years in May 2022, rates are set to continue rising.  This means term deposit interest rates will probably rise in the next 12 months too, meaning it’s likely a better option to avoid missing out on rate hikes and opt for a shorter term.

Who can take out a term deposit?

Term deposits are open to all adults, pensioners, couples, businesses and self-managed super funds. There are also term deposits available for kids aged 13 or older, although some banks do have a minimum age limit of 18.

Do all term deposits have a fixed interest rate?

Yes – the nature of term deposits is that they have a fixed interest rate applied for a fixed period.  If you require variable interest, some high-interest savings accounts offer reasonable rates.  However, because these are required to be linked to other accounts which are accessible via debit card, they’re not as high as term deposits.

How can I calculate how much I’ll earn with my short term deposit?

Interest calculations can be quite complex if compounding is involved. Luckily, you can use Savvy’s term deposit calculator to do those complex sums for you.