Highest term deposit rates – April 2019

William Jolly By on April 1, 2019
Highest term deposit rates

Term deposit rates are pretty low at the moment, but that doesn’t mean you can’t snap up a better rate for yourself. Savings has collated some of the highest term deposit rates available this month for a variety of term lengths. 

Term deposits are by definition a simple product: you deposit a stash of money in an account for a fixed period of time and earn a fixed rate of interest. They’re offered by Authorised Deposit-Taking Institutions (ADIs) which means up to $250,000 of your money will be guaranteed in the rare event the institution goes bust.

At the end of the fixed period, you could either reinvest the money in the same or a different deposit, or you could cash out and, say, splash out your interest earnings on a beach holiday or something.  

That beach holiday would need to be pretty cheap though, as term deposit rates aren’t exactly mind-blowing at the moment. Thanks to Australia’s historically low-cash rate that’s more stagnant than a muddy mozzie-infested pond, term deposit rates are also at all-time lows. You’d be forgiven for forgetting that term deposit rates used to be around 17% in the late 80s. 

That doesn’t mean you shouldn’t look around though. If you don’t, you run the risk of being stuck with a bludge of an interest rate, and unlike savings accounts, you often can’t get your money out without copping an early withdrawal penalty and/or serving a 31-day notice period. 

In this article, you’ll find regularly updated tables (once every month) of the highest term deposit rates on the market for both long and short term deposits. Specifically, we’ll cover: 

  • Six month deposits; 
  • One-year deposits;
  • Two-year deposits;
  • Three-year deposits;
  • Five-year deposits; as well as
  • ANZ, CBA, NAB and Westpac’s term deposit rates

Enjoy looking at some numbers. 

Note: the products in the tables below are sorted first by the advertised interest rate, then by the provider’s name. 

High short term deposit rates – six months 

Two term deposits share the spoils on our list of the highest rates for six-month terms – Arab Bank and RaboDirect. Bank of Sydney used to share top spot, but a recent 5-basis point drop has seen it fall to 2.80%.

Note that the advertised interest rate is per annum – once a year. So for a six month deposit, you’d actually earn half of that. 

CompanyAdvertised interest rateInterest frequency 
Arab Bank2.85%End of term
RaboDirect2.85%End of term
Bank of Sydney 2.80%End of term
MyState2.76%End of term
AMP2.75%End of term

Information accurate as at April 1, 2019.

High one-year term deposit rates

Arab Bank again features in top-spot, but a number of providers who used to share this position have dropped off, including Gateway Bank.

CompanyAdvertised interest rateInterest frequency 
Arab Bank2.85%Annually 
Teachers Mutual Bank2.80%Monthly and annually
UniBank2.80%Monthly and annually
Bank of Sydney (online-only offer)2.76%End of term
G&C Mutual Bank2.75%Annually

Information accurate as at April 1, 2019.

High two-year term deposit rates

G&C Mutual Bank takes out our top two spots for two different term deposit products – one with a higher rate that pays out interest annually, and one that pays monthly. Read this article on how the frequency of interest on term deposits can affect your final amount. 

CompanyAdvertised interest rateInterest frequency 
G&C Mutual Bank3.00%Annually 
G&C Mutual Bank2.95%Monthly 
Teachers Mutual Bank2.90%End of term, monthly and annually
UniBank2.90%End of term, monthly and annually
Police Bank2.90%Semi-annually

Information accurate as at April 1, 2019.

High three-year term deposit rates

There are a number of different providers that share a term deposit rate of 3.00%, some of which offer multiple different interest payment frequencies. There’s plenty of competition among three-year deposits, but you can currently get similar interest rates for two-year terms.

CompanyAdvertised interest rateInterest frequency 
Teachers Mutual Bank3.00%End of term, monthly or annually
UniBank3.00%End of term, monthly or annually  
Australian Unity 3.00%Annually
Qudos Bank3.00%Monthly or annually 

Information accurate as at April 1, 2019.

High five-year term deposit rates

RaboDirect dominates our list of the top interest rates for five-year term deposits.

CompanyAdvertised interest rateInterest frequency 
Police Bank3.05%Semi-annually 
Bank First3.00%Annually 
Australian Unity3.00%Annually 
BankVic3.00%End of term, annually
G&C Mutual Bank3.00%Annually
People’s Choice Credit Union3.00%Annually
RACQ Bank3.00%Annually

Information accurate as at April 1, 2019.

Highest term deposit rates from the big 4 – ANZ, CBA, NAB and Westpac 

You can see in the table below the term deposit rates from ANZ, Commonwealth Bank, NAB and Westpac don’t fare as well as some of the rates above. 

CompanyAdvertised 6-month rateAdvertised 1-year rateAdvertised 2-year rateAdvertised 3-year rateAdvertised 5-year rate
Westpac 2.05%2.25%2.25%2.30%2.40%

Information accurate as at April 1, 2019.  

In fact, the Reserve Bank’s monthly Retail Deposit Rates data showed the average big four (plus Macquarie) term deposit interest rate across all terms was 2.20%. This is much lower than any of the interest rates shown here. 

What affects a term deposit’s interest rate? 

Each provider has several if not dozens of term deposit products with varying rates. This leads to a huge variety of interest rates. For example, you could get a one-year term deposit rate as high as 2.85% but also as low as 1.30%. That’s a big difference. On a $10,000 term deposit invested for one year, that difference in interest rates could result in a difference of over $150 in interest. 

There are a multitude of different factors that impact a term deposit’s interest rate, which we explain in greater detail here. To give a quick summary, there are as many as seven factors influencing the day-to-day interest rates of term deposits:

But remember when you take out a term deposit, your interest rate is fixed, which means locked in. Hypothetically, the bank could drop its interest rates to 0.01% and you’d still have the same interest rate you did at the beginning until your term has expired. 

Have rates always been this low? 

Not at all. Just back in 2009, the average big four term deposit rate was 5.25%, when the RBA cash rate was 7.2%. In fact, a few decades ago you could get your hands on a term deposit with an interest rate of 17%. Today’s deposit rates really pale in comparison with interest rates of the past. 

Of all the factors that influence a term deposit’s interest rate, the cash rate is arguably the most crucial. Some banks will choose to not pass on cash rate changes to customers, but most do, so when the cash rate moves, so do term deposits rates. 

How to compare term deposits

Term deposits are a pretty simple product, so there are really two major things to consider: 

  • The interest rate
  • The term 

There are some other things to be aware of, such as whether or not your term deposit has an automatic rollover, but really, you need to make sure the term on your term deposit matches your requirements – you don’t want to have your money stuck in a five-year term deposit when you need to access it after one. This is how you get slugged with early exit penalties

So make sure you get a good combination of a good interest rate and suitable term length. Use a term deposit calculator beforehand to work out how much interest you’ll earn, and think about seeking the help of a licensed financial adviser.

Savings.com.au’s two cents 

If you’re a keen term deposit investor, make sure you check this page before opening a new one or when your current term deposit is about to expire. Term deposit rates are always changing, so make sure you keep coming back to our term deposit rates and term deposit news pages, which collate all our latest term deposit market updates. 

Photo by Samuel Zeller on Unsplash

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