December snapshot: Term deposit rates slashed in wake of RBA cut

By Tara McCabe · · 2 min read
Fact Checked
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In November another Reserve Bank cash rate cut occured, and since then Mozo has counted an astounding 785 reductions to term deposits. The average cut was 13.7 basis points and the average rate for a one-year term fell 11 basis points to 0.65% p.a.*

Now while it’s clear that interest rates for term deposits aren’t what they were a few years ago, there are still solid reasons to put your money in one. These won’t be the same reasons as they were when interest rates were high, but with a changing financial landscape, now might be the time to rethink motivations.

Time to go 50:50?

As interest rates plummet toward zero, it’s time to stop and think about where to stash that extra cash. Yes, you might be able to get a more competitive savings rate right now, but consider that Mozo counted 44 cuts to ongoing savings rates in November and 16 cuts to introductory savings rates. Introductory rates were cut on average a significant 23 basis points.*

With a term deposit you can lock your money away and fix your interest rate. Of course, the downside of that is that you won’t be able to access that money for the duration of the term. Our Mozo experts suggest considering a fifty-fifty approach. That is taking advantage of more competitive savings rates while they last, but also stashing half your rainy day fund in a term deposit.

Term deposit rates above 1

While term deposit rates have fallen dramatically in the past year, there is still time to lock one in above 1%. Currently Judo Bank dominates the longer terms in the Mozo database, its interest rates are:

  • Judo Bank 2-year term - 1.30% p.a.
  • Judo Bank 3-year term - 1.30% p.a.
  • Judo Bank 4-year term - 1.20% p.a.
  • Judo Bank 5-year term - 1.30% p.a.

Or if you’re looking for a slightly shorter commitment, BankVic offers a one-year term deposit with an interest rate of 1.05% p.a.

Want to start searching for a term to put your money in? Check out Mozo’s compare term deposits page for more options, or take a look at the deals below for a quick scan of what’s on offer.

Compare term deposit interest rates - last updated 6 August 2022

Search promoted term deposits below or do a full Mozo database search . Advertiser disclosure
  • Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.30% p.a.
    1 year
    $5,000
    Yes up to $250,000

    Competitive interest rates available. Terms ranging from 1 month to 5 years. No account fees to be paid. Interest can be paid to another account. Option to choose when interest is paid. Minimum deposit of $5,000 required.

    Go to site
    Details
  • Mozo Expert Choice Badge
    Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.25% p.a.
    1 year
    $5,000
    Yes up to $250,000

    Competitive rates for one year term deposits. Start investing with as little as $5,000 to $1,000,000. For personal customers who want to invest above $500,000, or for non-personal customers, contact Challenger’s call centre to discuss account application options.

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    Details
  • Hot Deal Earn a competitive rate of 3.24% half yearly or 3.25% annually on an 18 month term
    Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.10% p.a.
    1 year
    $5,000
    Yes up to $250,000

    Deposit of $5,000 up to $5 million. Choose a term from 1 month to 5 years. Select a range of convenient interest payment options. $0 establishment or ongoing fees. Easy tracking using the mobile banking app.

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    Details
  • Mozo Expert Choice Badge
    Online Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.35% p.a.
    2 years
    $5,000
    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.

    Go to site
    Details
  • Mozo Expert Choice Badge
    Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.25% p.a.
    1 year
    $1,000
    Yes up to $250,000

    Start with as little as $1,000. Interest paid monthly, quarterly, half yearly or yearly (Terms and Conditions apply)

    Go to site
    Details

*Averages and rates correct as of 30 November 2020.

* 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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