Can you still get a good rate on a 5-year term deposit?

Interest rates had some of their steepest growth in the past two years, with term deposits ending up with some pretty high rates. However, with the RBA holding rates for the past few months and CPI inflation slowing, many economists are predicting rate cuts for later in the year. 

Since term deposits let you lock your cash for a predetermined period at a fixed interest rate, many savvy savers will probably think that now is a great time for a long term rate. Yet, a lot of banks have recently revised longer period term deposits downwards from their heights. 

So if you're considering a 5-year term deposit, you might be wondering whether you can still get a good rate. Here’s where we currently stand … 

What are the term deposit rate averages?

Term deposit rates can vary widely depending on the provider, the amount deposited, and the term length. Under normal circumstances, longer terms like 5 years would offer higher interest rates compared to shorter terms. This is because the bank can utilise your funds for a longer period; in return, they're willing to pay you more. 

Right now though, shorter term deposits are currently offering the highest rates. The highest rate term deposit on the Mozo database is a one year rate of 5.30% p.a. from Family First’s special term deposit. 

But the top rate of a term doesn’t give us the full picture. That’s why the Mozo data team crunches the numbers on all the 81 term deposits we track in our database so we can find the average and median rates for a bunch of term lengths.  

Term Length
Average Rate
Median Rate
3 month
3.75%
3.73%
6 month
4.26%
4.45%
9 month
4.26%
4.50%
1 year
4.60%
4.75%
2 years
4.09%
4.05%
3 years
3.92%
4.00%
4 years
3.81%
4.00%
5 years
3.85%
4.00%

Top 5-year term deposit rates

If we keep the averages in mind, any 5-year term deposit above 4.60% is better than the average one year rate. This means that there are still 5-year terms that are currently worth considering. Let’s compare the top two. 

  • Judo Bank Term Deposit: With a 5-year term deposit rate of 4.85% p.a.,Judo Bank leads the pack. Judo’s term deposit requires a minimum $1,000 deposit. Once a deposit has reached maturity, you can reinvest it for a 0.10% loyalty bonus on top of the agreed-upon interest rate. 
  • Rabobank Term Deposit: The second highest 5-year term deposit at a rate of 4.60% p.a., Rabobank's term deposit user must also open and hold a Rabobank High Interest Savings Account. Like the Judo Bank term deposit, it has a minimum deposit of $1,000 and a 0.10% loyalty bonus when reinvested.

Term deposit features to consider

When choosing a term deposit, the interest rate isn't the only factor to consider. Here are a few other aspects to keep in mind:

  • Minimum Deposit: While the top two highest 5- year rates had a $1,000 minimum, some providers require as much as $25,000. 
  • Access to Funds: Term deposits lock up your cash for the term. Early withdrawal often results in penalties and reduced interest rates. Even then, you usually have to give 31 days notice before you can even get the cash back. So, it's important to make sure you won’t need that cash or have an emergency fund in case you need the extra cash. 
  • Inflation and economic conditions: The real value of the interest you earn should also account for inflation. The Consumer Price Index (CPI) from the 12 months to the December quarter was measured at 4.1%. 
  • Other benefits: Some banks offer additional benefits like loyalty bonuses or preferential rates for existing customers. For instance, if you reinvested a Judo bank term deposit with the 0.10% loyalty bonus, your interest rate would go from 4.85% p.a. to 4.95% p.a. This assumes the rate won’t change, though it most likely will, so keep that in mind.

Are 5-year term deposits still worth it?

Short answer, yes. You can still find good rates on 5-year term deposits that are above the average rates for most terms. The key is to shop around and compare the rates offered by different providers. 

If you’re ready to get started, check out our term deposit hub or have a look at the 5 year term deposit page. Alternatively, you can check out some of the providers in the table below… 

Term deposit comparisons on Mozo - last updated 16 April 2024

Search promoted term deposits below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Term Deposit

    4.90% p.a.
    5 years

    $1,000

    Yes up to $250,000

    Enjoy a competitive fixed interest with the choice of 1 month to 5 year terms. Start with as little as $1,000. Interest paid monthly, quarterly, half yearly or yearly. Receive a 0.10% loyalty bonus when you automatically reinvest your Term Deposit before maturity. (Terms and Conditions apply)

    Compare
    Details
  • Online Term Deposit

    -

    -

    Yes up to $250,000

    No set-up or account keeping fees. Deposits up to $250,000 per customer are guaranteed by the Australian Government. Mozo Experts Choice winner for Term Deposit 2022.

    Compare
    Details
  • Term Deposit

    4.00% p.a.
    5 years

    $1,000

    Yes up to $250,000

    Enjoy the certainty of a fixed interest rate combined with the convenience of online banking to set up and manage your term deposit at maturity. You can start investing from as little as $1,000 or up to $5,000,000.

    Compare
    Details

* 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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