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How to find the highest term deposit rates

 Is a term deposit better than a high interest savings account? 

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Last updated: 02 November 2020
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Need to know

  • It’s hard to find a term deposit that has higher interest rates than savings accounts.
  • A term deposit gives you certainty as rates are fixed for the term. But you’ll have to pay break costs if you need the money earlier.
  • Beware of rolling over a term deposit at the end of the term as it may change to a much lower rate.

Term deposits fix your savings for periods between one month to up to five years. Interest is often paid at the end of the term but sometimes also monthly, quarterly or annually for longer-term investments.

But are term deposits better than high interest savings accounts? We give you the lowdown on term deposits to help you find the best deal for your needs.

Are term deposits better than high interest savings accounts?

In the past, term deposits offered higher interest rates than high interest savings accounts, particularly over longer terms. But term deposit interest rates have fallen. 

At a time of record low interest rates, you'd be hard-pressed to find a term deposit rate higher than the highest rate offered by a high interest savings account.

High interest savings accounts are also more convenient: you can access your money at any time and don't have to pay a break fee as with a term deposit. 

But a term deposit could be a good option if you like the financial discipline to have the money locked away so you can't touch it. There are some good rates available for term deposits if you shop around and check for special deals.

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How do term deposit rates compare with high interest saving accounts?

The following information is from 29 October 2020.

High interest accounts

  • 2% (0.55% standard rate) Rabobank High Interest Savings Account. Bonus rate condition: for the first four months from account opening, reverting to standard variable rate.
  • 1.6% (0.1% standard rate) Up Savers account. Bonus rate condition: make five or more card purchases per month from Up Everyday account. Balances up to $50,000.
  • 1.6% (0.8% standard rate) Heritage Bank Online Saver account. Bonus rate condition: for the first four months from account opening, reverting to standard variable rate.

Term deposits rates for a $10,000 term deposit

  • 1.20% – 6 month Judo Bank term deposit
  • 1.23% – 12 month Judo Bank term deposit
  • 1.55% – 3 year Judo Bank term deposit

ANZ, Westpac, CBA and NAB term deposit rates

The following information is from 26 October 2020.

How do term deposit rates from the big banks compare

We've selected the best rates available for a $5000 term deposit for a term of up to 12 months*.

ANZ – 0.75% for 10 months

CBA – 0.65% for 12 months

NAB – 0.6% for 12 months

Westpac – 0.65% for six months

* 31 days notice required and a break fee applies if you want to get your money early.

How to find the highest term deposit rates

  • Rates vary depending on the amount of your deposit, the institution and the term, so shop around. 
  • Look at all the terms available from the institution. For example, when we looked in October 2020, ANZ offered 0.75% for a 10-month term deposit but only 0.6% for nine or 11 months.
  • Look for specials. Financial institutions sometimes decide to promote a specific term – for example, six months — for their best rates. Watch for 'blackboard specials' outside branches, too.
  • Institutions are covered by the Australian Government Deposit Guarantee Scheme, introduced during the GFC, which covers each bank customer up to $250,000 per institution. Only ADIs can offer deposit accounts.
  • Don't let your term deposit roll over. Always check for the best rates available even if you don't want to switch banks.
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