When it comes to saving, it is often said that you should never put all of your eggs in one basket. This only means that you should not put all of your savings in one account or investment product. This is to minimise risk of losses and ensure that your money will give you much better returns. There are so many “baskets” or savings and investment products to choose from, and one of them is term deposit.
Not easily accessible
Your money is locked away for a certain period, so you cannot easily access your money in the term deposit.
Term deposit is a form of investment that comes with a fixed interest for a specific period of time, or term. A lot of people opt for a term deposit since it offers flexibility on the range of terms, the fixed interest rate will not be affected by market fluctuations, and it helps you to be more disciplined when it comes to saving. Your money is locked away for a certain period, so you cannot easily access your money in the term deposit.
Here are some things to take into account to find the term deposit that suits you:
The interest rates for term deposits are a main consideration when looking for a term deposit that suits your needs and financial situation. There are a lot of banks that offer term deposits so make sure to find a fixed interest rate that offers guaranteed and better returns. It helps to do a term deposit comparison so you will be able to check their features and make a more informed choice.
Another thing to consider is the term or the specified period for the term deposit. Short term deposits can be 30 days up to less than a year, while long term deposits can be one year up to five years. Upon checking the offerings of various banks, you’ll find out that the longer the term is, the higher the interest rate tends to be.
It is also important to determine how often the interest is paid on your money. It can be monthly, quarterly, annually or even at maturity.
Getting a term deposit doesn’t come with a setup fee or ongoing fees. However, take note that there may be a charge should you withdraw your funds sooner. Of course, there will also be a reduction on your returns.
Got other ideas on term deposit comparison and interest rates for term deposits in Australia? Share your insights in the comments section.