CommBank ups term deposit rates - but well below market's best

Commonwealth Bank's new best rate is its Special Offer 5.10% p.a. for a one-year deposit of between $5,000 and $5 million, with interest paid annually.

It's available to personal and SMSF customers opening or renewing at the special rate via online or in-branch channels.

CommBank says the deal will be available for a limited time only.

It pays (literally) to shop around

But 5.10% p.a. for 12 months is hardly setting the term deposit market alight.

While it's higher than the current 12-month offers of the big four, it's considerably below the market's top one-year rate of 5.45% p.a., now being offered by smaller players Gateway Bank and MOVE Bank.

MOVE is also paying 5.50% p.a. for an 11-month deposit of amounts over $5,000.

Other perennial contenders for the market's top rates are also offering considerably better 12-month deals, including:

• Heartland Bank: 5.40% p.a. (balances $10,000 and over)
• Judo Bank: 5.35% p.a. (balances between $1,000 - $2 million)
• AMP GO: 5.35% p.a. (balances between $5,000 - $10 million)

All of the above are paying end-of-term interest. 

For those looking to lock away for longer terms, the online Rabobank is currently offering 5.70% p.a. for a five-year term for amounts between $500,000.01 and $2 million with interest paid annually.

Is it safe to open a term deposit with a small bank?

The short answer is yes, and if you want to be extra sure you won't lose your money, you can deposit your cash with different banks in chunks of $250,000.

All Australian authorised deposit-taking institutions (ADIs) are backed by a federal government pledge to guarantee the deposit funds of Australian customers up to $250,000 at each institution.

This means in the unlikely event of a smaller bank somehow going under, the government will make sure you get up to $250,000 of your deposited money returned to you.

Many deposit customers with large wads of cash will deposit $250,000 across multiple institutions to take advantage of this back-up.

The trick is to ensure you're not lodging with different brand names that are part of the same entity, such as Westpac and St George Bank for example.

Westpac is the owner of the St George brand so only one lot of $250,000 would be guaranteed if they were to go down.

So, if you're eyeing great rates with the smaller players but are a bit hesitant to deposit outside the big banking names, you can rest easy that you've got a good chance of keeping your cash should disaster strike.

What term deposit rates are the big four offering?

But data consistently shows us many Australians prefer to keep their cash with the big four despite their lower returns.

Such is the advantage of having a well-established brand and rusted-on customers. 

Challenger Macquarie Bank has made some inroads in the big four's household deposit market in recent years, largely on the back of its popular no strings savings account product.

For those who still aren't comfortable finding better rates outside the big players, here are their current 12-month term deposit offerings:

With economists in general agreement there will be further interest rate increases in 2026, it may also pay to take advantage of high savings account rates for the time being before locking your cash away.

Canny depositors will be looking to jump in on high term deposit rates as the cash rate looks to set to come down again - although no one is certain when this could happen.

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Want to earn a fixed interest rate on your cash? The table below features term deposits with some of the highest interest rates on the market for a six-month term. 

Deposit term

6 months

Deposit amount

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Bank	Term Deposit	Interest Rate	Interest Frequency	Term	Automatic Rollover	Maturity Alert	Early Withdrawal Available	Minimum Deposit	Maximum Deposit	Notice Period to Withdraw	Account Keeping Fee	Online Application	Joint Application	Tags	Features	Link	Compare	Promoted Product	Disclosure
MoveBank	MoveBank Term Deposit - 6 months	5.35% p.a.	At Maturity	6 months				$5,000	$19,999	–	–					More details	Compare
ING	ING Term Deposit (online) - 6 months	5.20% p.a.	At Maturity	6 months				$10,000	$5,000,000	–	–					More details	Compare
Unity Bank	Unity Bank Fixed Term Deposit - 6 months	5.15% p.a.	At Maturity	6 months				$1,000	$1,000,000	–	–					More details	Compare

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Personal Term Deposits - 11 months

Product Features

• Available for individual and joint accounts
• No application or monthly account fees
• Backed by an Australian Government Guarantee up to $250,000

Minimum deposit $1,000

5.25% Interest rate p.a.

11 months Term

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