Why term deposits aren’t just for boomers
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If you’re not in the financial comparison game like we are here at Mozo, you may be unaware that it’s a lot harder to get a high interest rate on your savings account without some kind of ‘condition’ attached.
Now, don’t get us wrong. Sometimes those conditions are a great incentive to stick to your savings guns because if you don’t, you won’t earn extra interest, but other times they can be burdensome.
A Retail Deposits Inquiry Report done by the Australian Competition and Consumer Commission (ACCC) actually found that 71% of bonus interest savings accounts did not receive bonus interest in any given month, which points to the complexity of how hard it can be to keep track of.
And this is why a term deposit is worth considering if you want a hassle-free way to grow your savings.
The idea that term deposits are “just for boomers” is outdated, says Peter Marshall, Mozo’s banking expert. He points out that many term deposits are less restrictive than high interest savings accounts, are easy to set up and manage 100% online and can be fine-tuned to meet your savings goals.“One of the biggest added benefits of a term deposit is that you are guaranteed a fixed rate of return,” he said. “The minimum investment depending on the provider is usually between $500-$5000 and there is flexibility to choose the investment window that suits you best whether that’s 1 month or 5 years.”
Here are the Mozo money editor’s top Term Deposit picks for this month, along with some hassle-free savings accounts to consider.
Term Deposits
Judo Term Deposit
- 4.85% p.a. for 6 month term
- 4.70% p.a. for a 1 year term
- Mozo Experts Choice Award - Best Term Deposit Winner
Judo Bank maintains its position as a market leader with some of the highest term deposit rates available. Their offerings span from three months to five years, with flexible interest payment options including annual, maturity, or monthly payments (at a slightly reduced rate). A notable feature is their 0.10% interest rate bonus on rollovers at maturity, alongside the flexibility to have interest paid to external bank accounts.
My State Bank Term Deposit
While MyState Bank offers term deposits from as little as 1 month to 2 years, right now its most competitive rate is on a 6 month term at 4.75% p.a. All deposits up to $250K are covered under the Govt Deposit Guarantee Scheme. The account comes with an autorollover option, there’s no account fee and the application is 100% online but you can chat with one of MyState’s Australian-based customer service team.
Savings Accounts
Macquarie Bank - Savings Account
- Introductory rate of 5.10% p.a. for the first four months (on deposits up to $250,000)
- Ongoing 4.75% p.a. rate
Macquarie Bank’s Savings Account offers an interest rate up to 5.10% p.a. for the first four months on balances up to $250,000, and then the rate reverts to a competitive ongoing 4.75% p.a. rate. Keep in mind that balances above $250,000 receive a lower rate. It also comes with no account keeping fees, which is always a plus. To use this savings account, you must have a Macquarie Transaction Account.
P&N Bank Hi Saver
Earn bonus interest on your savings for the first four months (standard rate of 0.25% p.a. applies thereafter) from the date you open the account, even if you make withdrawals with the P&N Hi Saver Account. Conveniently transfer or make payments using our mobile app or internet banking. There is no minimum balance required. Rest easy knowing total deposits up to $250,000 are protected by the Financial Claims Scheme.
BCU Bank Bonus Saver
Earn bonus interest on your savings for the first four months (standard rate of 0.25% p.a. applies thereafter) from the date you open the account with the BCU Bonus Saver Account. There’s no minimum balance required and no monthly or ongoing fees or withdrawal penalties. Plus, you can manage your money easily via phone or online banking or via the BCU Bank app.
* Different interest rates apply to different amounts or different interest payment frequencies.
^See information about the Mozo Experts Choice Term Deposit Awards
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