If you’re looking for ways to grow your money without risks, consider a term deposit. It’s a low-risk investment that is ideal for those who want to take the conservative route in saving and growing their money. A term deposit comes with a fixed interest rate, allowing your savings to grow just by leaving it in the account for the entire term.
Since your money is locked away for a certain period of time, a term deposit can help develop good financial habits and discipline, teaching you to be patient and resist the temptation of withdrawing your savings.
Here are other things that you need to know about term deposits in Australia:
Because of the guaranteed returns, term deposits are widely regarded as a safe way to let your money work for you. Banks usually offer a higher interest rate on term deposits compared to regular savings accounts, so if you have some money that you don’t need in the near future, you may want to put it in a term deposit to get the most out of the interest rate being offered.
Also, since your money is locked away for a certain period of time, it develops good financial habits and discipline, teaching you to be patient and resist the temptation of withdrawing your savings.
With so many banks offering term deposits, it pays to compare their features and see which account suits your needs and financial preferences. Aside from checking the most competitive interest rates, think about the term or duration that suits you best, as well as the amount of money that you’re willing to lock away.
Even if you choose a bank that’s different from where you maintain your savings account, the risks are still very low.
Here are other considerations when it comes to term deposits:
You can have a term deposit free of charge
Unlike other investment products such as funds and stocks, term deposits don’t usually come with a fee. However, some banks may require a minimum deposit amount. Also, you may be required to pay a fee or penalty if you want to withdraw your money sooner than the maturity date.
Term deposits are seen as a low-risk investment
Because of the fixed interest rate, you know how much money you’ll get come maturity date. Unlike in other investments where the chances of losing money can be significant, term deposits guarantee gains. The Australian government guarantees deposits, such as term deposits, up to $250,000 in authorised deposit-taking institutions such as banks or credit unions.
Do you have other ideas on term deposits in Australia? Share your insights in the comments section.