Term Deposits

Term deposit rates for 2 years, 3 years & 5 years

If you’re looking to invest some money long-term, then why not consider a long term deposit for the next few years?

2-year term deposit interest rates

The average two-year deposit rate is about 0.52% p.a as at May 2021, almost a third of what it was (1.44% p.a) in January 2020, but still a little higher than the average. The table below displays a snapshot of some of the highest term deposit interest rates around for two-year terms.

3-year term deposit interest rates

Three-year deposits currently have an average rate of around 0.54% p.a, slightly higher than two-year deposits but still well down compared to a couple of years ago. The table below displays a snapshot of some of the highest term deposit interest rates around for three-year terms.

5-year term deposit interest rates

The average five-year deposit rate is also 0.52% p.a, at the time of writing (May 2021), and is above the market above. The table below displays a snapshot of some of the highest term deposit interest rates around for five-year terms.

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What is a long term deposit?

While ‘short term deposits’ are generally classified as being for a year or under, long term deposits can be classed as anything over a year. With most banks, terms can last for up to five years, although you can sometimes get terms that last for seven. So the common terms seen for long term deposits include:

  • Two years
  • Three years
  • Four years
  • Five years
  • 18 months
  • 30 months

Holding a term deposit for a longer period of time is not without its risks, as you have to wait longer before you can access your money. But as we’ve showcased above, you can often access some higher interest rates.

Interest rates on long-term deposits

With the average interest rate sitting at just 0.43% p.a in 2021, long term deposit rates can offer some rates that are higher than this. While the average deposit rate for various longer terms also hovers around the 0.50% mark, the highest rates available for these terms are often a bit more impressive. The idea behind this is banks want to encourage customers to deposit their money for longer so the bank can use the funds to offer things like home loans, so banks might offer some enticing interest rates to attract longer-term funds.

Why pick a long-term deposit?

There are a few reasons to pick a long term deposit. They can offer higher interest rates, can store your money away securely for longer and can also help you avoid any future interest rate decreases. Someone who locked in a long term deposit a few years ago at 3-4% interest rates is probably laughing all the way to the bank seeing the way rates are now.

On the other hand, if rates increase you can miss out on some substantial gains, as term deposit rates are always fixed. Plus, should you ever need the money, you’ll have much longer to wait unless you’re prepared to cop a penalty.

When looking at a long term deposit, ask yourself:


The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Term Deposit Providers