Savings accounts vs term deposits

Ah yes, the ancient paradox of Which Is The Better Saver? After millennia of rather Zen perplexity, Mozo has unravelled the mystery.

• Term deposits give you better interest rates with less flexibility.
• Savings account rates aren't as high, and are subject to change, but you can access the money.

Term deposit catches

• Term deposits (particularly 3 or 6 month accounts) sometimes offer worse rates than some market-leading savers. Miserable but true.
• And you may not want to lock your money away for a long period if, for example, interest rates are rising - because that heart-throbbing savings rate may look rather weedy in a year or so.

Savings account catches

• Reserve Bank interest rates are always fluctuating, but banks are often slow to ramp up your savings interest rates (or simply don't). Unless you've kept close tabs on the savings account market over the last few years - and let's be honest, why would you? - the best guide is probably account reviews from actual customers.