Compare 6-Month Term Deposit Rates

What is a six-month term deposit?

A six-month term deposit allows you to invest your savings with the security of a fixed interest rate over a defined six-month period. 

During this period, your money is generally locked away, earning interest that is typically paid either monthly or at maturity (end of the six-month term). The interest is locked in for the duration of the term, so you know exactly the return you’ll receive. 

The catch, however, with short term deposits is that you generally have limited access to your money. Early withdrawals, meaning you take the funds out before the term ends, typically involve penalties or reduced interest. 

See also: Term deposits early withdrawal fees

1. Following Reserve Bank of Australia’s cash rate increases between 2022 and 2023, term deposit rates have soared to compete with the rise in savings account rates. While rates have since stabilised, six-month term deposit rates remain competitive in 2026, with some major and smaller banks, credit unions, and building societies offering returns of around 5.00% p.a. or higher. 

Six-month term deposits vs Savings accounts

Six-month term deposits can be an effective short-term savings option for those seeking certainty and who want limited access to their funds. 

Because the interest rate is fixed during the term, you know exactly how much returns you’ll earn. This can be particularly useful if you’re saving towards a specific goal (e.g. a holiday or a car) and don’t want market fluctuations to affect your interest earnings. 

With limited access, six-month term deposits can also suit savers who prefer a ‘set-and-forget’ approach or those who may be tempted to dip into savings if an expense arises. 

Savings accounts, by contrast, provide greater flexibility as they are often linked to everyday transaction accounts and allow deposits, transfers, and withdrawals. 

However, savings account interest rates are variable, meaning banks can adjust them in response to factors such as movements in the cash rate. This can work in your favour in a rising rate environment, but not when rates are falling. 

See also: Savings accounts vs Term Deposits: Which is better?

Is money in a term deposit safe?

Money parked in a term deposit held with Australian banks, credit unions, and building societies that are authorised deposit-taking institutions (ADIs) is covered by the government’s Financial Claims Scheme. This scheme protects deposits up to $250,000 per account holder per ADI in the unlikely event that the institution fails. 

Should you choose a 12-month or longer term deposit? 

Longer term deposits, those ranging from one to five years, are also popular as they can sometimes offer higher interest rates than 6-month terms, but it isn’t always guaranteed and depends on market conditions. 

Term deposits 12 months and longer may appeal to savers seeking fixed returns for extended periods. However, since they require committing funds for a much longer time, they may be impractical if your circumstances change and may potentially leave you worse off if you access your funds before the term deposit matures. 

See also: How does term deposit time affect your returns?

When is interest paid on a six-month term deposit?

When interest is paid on a six-month term deposit ultimately comes down to the provider and the structure of the product. 

In Australia, interest earnings from term deposits can be paid: 

• Monthly
• Quarterly
• Semi-annually
• Annually
• At maturity (end of term)

For six-month terms, interest is typically paid at maturity, though some providers may offer monthly payments as well.

What happens when your term deposit matures?

When your term deposit matures, as in it has reached the end of its term, your provider will usually notify you and give you several options. You may opt to:

• Withdraw the funds
• Reinvest for another term
• Switch to a different product

If no instructions are provided during the specified period, banks usually automatically roll the deposit over into a new term, often at a lower rate. 

Thus, staying on top of maturity dates is important. If your deposit rolls over into an interest rate lower than what you previously had, it could mean missing out on better returns or offers that may be available elsewhere. 

See also: Understanding term deposit automatic rollovers

1. Savings.com.au’s two cents

For savers looking to park money away for a defined period, a six-month term deposit can strike a balance between interest rate certainty and short-term flexibility. 

Choosing a fee-free product with a competitive rate allows you to earn predictable returns and potentially reinvest every six months. That said, it’s important to compare your rates against the broader market at maturity. 

Term deposit rates can change, and better options may be available once your term ends. Keep an eye on your maturity date and review your options to ensure your savings continue to work as hard as possible.