Minimum Term Deposits

Compare the minimum deposit required for a range of term deposits right here with Savvy.

Last updated on August 18th, 2022 at 04:42 pm by Cate Cook

Compare term deposits

Minimum term deposit requirements vary widely across financial institutions.  That’s why it’s important to compare different providers to make sure you’re getting the highest interest rate possible for your savings.  Take a look at the varying minimum deposits required with Savvy, and read on to find out where to get the best deal on your savings.  Compare with us today to be sure you’re growing your funds as fast as possible.

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 minimum term deposits

What minimum requirements apply to term deposits?

There’s a wide range of term deposits available in Australia, ranging in size from $500 upwards, and in length from one month to five years.  The minimum dollar amount you’ll need to open a term deposit varies from bank to bank, and differs according to the length of time you wish to lock your funds up for, so it’s important to compare them before you decide on which is best for you.  The differences between providers of term deposits include:

Minimums for personal term deposits

The very smallest amount you’ll need to open a term deposit is $500, although such low minimum deposits are rare.  It’s more common to find retail term deposits with a $1,000 or even $5,000 minimum requirement.  The higher the interest rate on offer, the higher the minimum deposit amount tends to be.

Minimums for business term deposits

Once you start to compare business or self-managed super fund (SMSF) term deposits, the minimum deposit requirements are far higher.  Most business term deposits require a minimum of $5,000 deposit, ranging upwards to $25,000 or even more in the case of long-term high-interest investments.  Deposits for self-managed super funds, trusts and corporations follow the same trends and frequently offer the same interest rates as business term deposits.

How can I maximise the interest on my small term deposit?

To gain maximum interest on your minimum deposit, it’s important to compare as many options as you can with Savvy.  You’ll be able to choose the best term deposit for your needs with more confidence by comparing top rates and offers from different institutions.  Some other tips for increasing your total interest are: 

Look at smaller, online financial institutions

Look to the smaller online banks, building societies and credit unions to find the highest interest rates on term deposits in Australia.  For example, while a major bank may offer a 0.10% p.a. interest rate for a six-month deposit, a smaller institution could offer 1.95% p.a. for the exact same term (interest paid at maturity).  The resulting interest would be:

  • $10,000 invested for six months at 0.10% p.a. = $13 interest
  • $10,000 invested for six months at 1.95% p.a. = $98 interest

That’s why it’s important to compare as many financial institutions as possible before committing to your choice, as the best rates could be hiding in plain sight.

Consider a longer term

The longer you lock away your savings, the more time it’ll have to generate interest. Most financial institutions offer a range of short term deposits under 12 months in length and a range of long term deposits between one and five years.  The longer the term you choose, the higher the interest rate on offer.  It may not always be worthwhile choosing the minimum term deposit length.

Get your interest paid monthly and compound

Some institutions offer a slightly higher interest rate (often 0.05% p.a.) if you agree to have your interest paid less often. This may sound like a good deal if you don’t need the interest immediately, but don’t forget that you’ll lose the compounding effect if you only receive your interest annually.  However, if rates are the same, more frequent compounding is the better option.  Look at the following example relating to a $25,000 deposit invested for three years at a 3.60% p.a. interest rate:

  • interest paid monthly = total interest of $2,847
  • interest paid annually = total interest $2,798

This example shows how having your interest paid monthly increases the interest earned as a result of compounding.  You can use Savvy’s term deposit calculator to compare interest rates and work out exactly which the best deal is overall for your funds.

Remember that compounding only works if the bank or financial institution permits interest to be paid monthly and allows it to be paid back into your term deposit account to allow compounding to take effect.  Some institutions require your interest to be paid into another linked bank account, which means you won’t benefit from compounding your interest.

Shop around for special offers

Banks and financial institutions also advertise special offers occasionally to attract new customers and deposits.  Such specials can offer great value to the wise investor, so it’s worth checking back with Savvy often to take advantage of these specials. 

For example, a bank may offer a special interest rate of 2.85% for a six-month term with a minimum term deposit of $5,000, which may be much higher than competitors’ rates. Even on a $5,000 deposit over six months, you can see a marked difference:

  • $5,000 minimum deposit for six months @ 2.85% p.a. = $72 interest
  • $5,000 minimum deposit for six months @ 1.40% p.a. = $35 interest

What are the advantages and disadvantages of small term deposits?

Some of the main advantages of small term deposits include:

  • you’re not locking away too much of your capital, so if you need funds in case of emergency, you’ll have money immediately available
  • several smaller term deposits will give you more flexibility than one larger one, since you can choose different maturation dates for your different term deposits
  • the rates on offer tend to be higher and require less maintenance than savings accounts, so they may be better if you want to save more aggressively towards a goal
  • if you take out a smaller term deposit over a short period, you’ll gain access to your funds sooner and make them available if you’re unsure about whether you’ll need them down the track

However, the disadvantages of smaller term deposits could be summarized as:

  • you’ll have to keep track of when your deposit is due to end, as it could be rolled into another account automatically if you forget about it
  • the smaller the deposit, the less interest will be earned, so your nest-egg won’t grow as quickly
  • you won’t be able to take advantage of the higher interest rates sometimes offered to those who deposit larger sums with institutions who have a tiered interest rate on their term deposits

More frequently asked questions about minimum term deposits

Is it better to have a term deposit or savings account for a small amount of money?

If you want to lock your savings away to remove them from temptation and earn the highest possible interest rate, a term deposit may be the best option.  On the other hand, if you’re unsure about when you’ll need to use your savings, it’s probably better to keep them accessible in a savings account.

For this reason, many people have both a term deposit and a savings account so they can benefit from the best that both types of account have to offer.  It’s possible to have multiple term deposits with different institutions, too, which is why it’s so important to compare interest rates regularly with Savvy to find the best deals for your investments.

How much notice will I need to get access to my funds?

This will depend on the financial institution you choose.  Some don’t require any notice to withdraw funds, some ask for 14 days and others need up to 31 days before releasing your funds.  Compare this detail between institutions before you open your deposit so you know exactly what the rules are.

Are short term deposits the best when interest rates are rising?

If interest rates are rising, short term deposits may be the most beneficial so you can take advantage of those rising rates.  By the time one short term deposit is over, you can re-negotiate your interest rate to gain the best interest rate for your short term deposit.

However, if interest rates are falling, longer-term deposits offer the best protection from falling interest rates.  It’s worth checking back with Savvy frequently to see how interest rates are moving so you’re able to make the best financial decision for your savings.

How do I open a term deposit?

The process to open a term deposit is the same as that to open a savings account.  If you’ve never used a particular financial institution before, you’ll need to provide ID such as your passport and driver’s licence.  However, if you already have a bank account with that particular bank, it could be just a matter of filling in an online application form which could take minutes.  When you receive confirmation that your term deposit account is open, all you need to do is transfer the required amount into your term deposit.