Are smaller banks offering the best 1-year Term Deposits?
Getting the best interest rate for your cash often means shopping around for providers who are offering the best rates. While it can be tempting to lock in the longest rate possible with a term deposit, right now the shorter term is generally offering the highest rates. This is because many banks are anticipating rate cuts on the cards for later this year.
So, let’s take a look at the 1-year term deposit and ask, are smaller banks really offering the best rates for 1-year terms?
How smaller term deposit providers perform
Diving into the current term deposit market, it's clear that banks such as Heartland bank (formerly known as Challenger), Great Southern Bank, and Judo are all outperforming their larger rivals with much higher rates. Family First, for instance, offers a 1-year rate of 5.30% p.a. for its special term deposit.
While the Big 4 banks are offering fairly good term deposit rates, none are currently the highest rate possible on our comparison database and are below 5%.
Provider Name | 1 Year Rate | Minimum Deposit |
Heartland bank - Term Deposit | 5. 35% p.a. | 25,000 |
Great Southern Bank - Term Deposit | 5. 20% p.a. | 5,000 |
Alex.Bank - Term Deposit (invitation only) | 5. 10% p.a. | 10,000 |
Judo Bank - Term Deposit | 5. 10% p.a. | 1,000 |
You can find out more about how the big four term deposits compare here.
The benefits of choosing smaller banks for term deposits
There are a couple of benefits to signing up for smaller providers, most stemming from the very smallness (and sometimes more customer-focused if the provider is a credit union or mutual bank).
- Competitive rates: As shown, smaller banks are presently offering some of the most competitive interest rates in the market. This is done to attract new customers as they don’t have the same trust that most consumers have in bigger banks.
- Customer-focused approach: Smaller banks are often customer-owned banks that prioritise customer satisfaction over shareholder profits. This can lead to more advantageous terms, personalised service, and a community-centric banking experience.
- Usually safer than you think: The Australian banking sector is a well-regulated machine, so smaller banks aren’t as risky as they would be in other countries. Since most smaller banks in the Mozo database are Authorised-Deposit-taking institutions (ADIs), a deposit of up to $250,000 is guaranteed in case of collapse by the government. However, a banking collapse is very unlikely to happen.
You can check out more about term deposit providers beyond or below just 1-year on our main hub page. We track up to 81 term deposit providers on our database so you’ll have plenty to compare between. Alternatively, you can check out some providers in the tables below.
Term deposit comparisons on Mozo
-
Term Deposit
5.00% p.a.
1 year$1,000
Yes up to $250,000
Great rates and incentives incl. 0.10% added loyalty bonus at renewal. Option to have interest paid to another bank. Winner of the Mozo Experts Choice Awards 2024^ for Term Deposits.
CompareCompareTerm Deposit
Great rates and incentives incl. 0.10% added loyalty bonus at renewal. Option to have interest paid to another bank. Winner of the Mozo Experts Choice Awards 2024^ for Term Deposits.
- interest rate
- 5.00% p.a.
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $2,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
Read reviews and learn more about Judo Bank term deposits
-
Term Deposit
3.80% p.a.
1 year$5,000
Yes up to $250,000
Grow your hard-earned savings with a P&N Bank Money Maker Term Deposit. Enjoy competitive, guaranteed fixed term rates. Interest paid at maturity for terms between 2 and 12 months. Interest rates may vary depending on the terms you select. Minimum amount of $5,000. Maximum amount of $1 million.
CompareCompareTerm Deposit
Grow your hard-earned savings with a P&N Bank Money Maker Term Deposit. Enjoy competitive, guaranteed fixed term rates. Interest paid at maturity for terms between 2 and 12 months. Interest rates may vary depending on the terms you select. Minimum amount of $5,000. Maximum amount of $1 million.
- interest rate
- 3.80% p.a.
- Minimum deposit
- $5,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $5,000.00
- Maximum deposit
- $1,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
Read reviews and learn more about P&N Bank term deposits
-
SMSF Term Deposit
5.00% p.a.
1 year$1,000
Yes up to $250,000
Apply digitally in minutes and manage your SMSF Term Deposit. Flexible cash flow management with three interest payment frequencies that suit you: monthly, yearly, or at maturity. Choose from terms of 3 months up to 5 years. No application or monthly account fees but eligibility criteria and terms and conditions apply. Only accessible to SMSFs with two or up to four individual trustees or one corporate trustee.
CompareCompareSMSF Term Deposit
Apply digitally in minutes and manage your SMSF Term Deposit. Flexible cash flow management with three interest payment frequencies that suit you: monthly, yearly, or at maturity. Choose from terms of 3 months up to 5 years. No application or monthly account fees but eligibility criteria and terms and conditions apply. Only accessible to SMSFs with two or up to four individual trustees or one corporate trustee.
- interest rate
- 5.00% p.a.
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $2,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
-
Term Deposit
4.50% p.a.
1 year$5,000
Yes up to $250,000
CompareCompareTerm Deposit
- interest rate
- 4.50% p.a.
- Minimum deposit
- $0.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $0.00
- Maximum deposit
- $5,000,000.00
- Can interest be paid to another bank?
- no
- Automatic rollover
- yes
Read reviews and learn more about Bendigo Bank term deposits
Your selected term deposits
Your selected term deposits
Your selected term deposits
Your selected term deposits
* Different interest rates apply to different amounts or different interest payment frequencies.
^See information about the Mozo Experts Choice Term Deposit Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.