Find some of the the best term deposits online

Shopping around for the best term deposit may be easier than you think. Rather than spending hours reading through various websites about term deposits, RateCity has done the hard work for you and put the key information in one place. This puts you in the driver’s seat to decide what type of term deposit you want to invest in. 

Before you jump into term deposits, there are three main things to consider:

• The size of your deposit
• The duration of your term
• The frequency you want your interest paid
• Knowing this information can help you better compare term deposits and find the best options to suit your needs.

Not all term deposits let you make additional deposits during the term, or withdraw money without penalty.

Most term deposits effectively lock up your money for the length of the term, so you can’t easily access your money until your deposit “reaches maturity” at the end of the term. After this, you can usually choose to roll your deposit over for another term and keep earning interest at the same rate, or switch to another term deposit that better suits your current situation. 

If you do need to withdraw money from a term deposit early, you may need to give advance notice (e.g. 31 days) except in cases of hardship. You may also need to pay a fee, and the interest rate on your remaining deposit may be adjusted down. And in some cases, you may not be able to withdraw any funds during the term unless you close your account. 

Because accessing your money early may affect the value offered by your term deposit, if you expect you may need to dip into your term deposit at some stage, the best option for you may be to look for a term deposit that offers penalty-free withdrawals. 

It’s not common practice to add extra money to a term deposit once you’ve opened an account. Usually, you open a term deposit with your initial cash contribution and that’s that.

Some banks now give you the option to make additional deposits within a specific timeframe, such as within a week of opening your term deposit, while others let you make deposits at any time.

If you do find a term deposit that allows extra deposits, you might want to find out whether there’s a limit on the number of deposits you can make.

For most term deposits, interest is calculated on the balance of your account at the end of each day, including the day of deposit but excluding the day of withdrawal.

Interest is calculated on your term deposit for a day by dividing the interest rate on the account by 365 (even in a leap year) and multiplying that sum by the account balance on that day.

Interest is calculated daily and can be paid in interim payments. If the term deposit you select is longer than 12 months, interest will be paid at least annually.

For many term deposits, you can choose when interest is paid. Some special term deposit offers only pay interest at maturity.

Depending on the term, you could opt to have interest paid monthly, quarterly, half-yearly, annually and of course at maturity. 

The fixed interest rate you’re paid is often linked to the frequency of interest payments. In other words, the more frequently you want to be paid interest, the lower the rate you may receive.