While many of us are getting our costumes on for today’s spooky Halloween festivities, other Aussies may have their budgets on the brain.
Today is also Worlds Savings Day and according to research by Gateway Credit Union, nearly three in four Aussies (74.4%) reported to have responsibly maintained a budget, compared to only 59% back in 2005.
Gateway’s CEO, Paul Thomas believes that the positive result comes from Aussies becoming more savvy with their money along with the added assistance from apps, other online tools and available information that are making us more engaged and hands-on with our cash.
“In the current context that is seeing more and more households squeezed from a financial perspective, thanks to an increasing cost of living and stagnant wages, many households are forced to tighten the purse strings and become more stringent with their finances,” he said.
As for for the rest of the country who didn’t budget, 60% believed that they were able to keep track of what they could afford, with 13% claiming that budgeting was too complicated and time consuming. Losing momentum throughout the year (8%) and having multiple bank accounts (18%) were also reasons to let budgeting fall by the wayside.
However, while it’s great news that Aussies are keeping their spending under control, there’s still room for improvement in making sure our savings are going to a good place and according to Mr Thomas, term deposits are the solution.
“Term deposits are a great way to boost your savings. Not only do you generate higher interest than a transactional account, but you also have restricted access, which means you won’t be tempted to dip into your savings for impulse purchases.”
On that note, we had a look at our term deposit database and rounded up the best term deposits between 1-5 years, just in case if you’re looking for a new place to stash your cash.
Current best term deposits for terms 1-5 years
- 1 year - 2.80% - ME and Police Bank
- 2 year - 3.00% - Police Bank
- 3 year - 3.10% - QBANK
- 4 year - 3.15% - RaboDirect
- 5 year - 3.25% - RaboDirect
But if you consider yourself to be with the 72% of Aussies who misunderstand term deposits and their time lengths, here’s a crash course on everything term deposits.
What is a term deposit?
A term deposit works like a savings account with one big difference - once you make a deposit, you are not allowed to touch the money until the specified term end.
Where can I get a term deposit?
You can get a term deposit at most financial institutions, but you should take the time to compare term deposits in order to find a great interest rate.
What are the features of a term deposit?
Fixed interest rate - Once you open a term deposit, you’ll be able to lock in a rate, which will be the interest you earn for the entire term.
Term length - You’ll have your choice of term length, which can start at 1 month and go up to 10 years.
Rollover terms - Depending on your bank, you may be offered a rollover term deposit. This means that you’ll be able to reinvest your savings automatically once term has ended.
No fees - One of the best features of a term deposit is that you won’t have to pay any startup, ongoing or annual fees.
Anything I should watch out for?
Automatic rollover - If you fail to let your bank know what you want to do with the money by the maturity date, they can automatically roll it over, usually at a lower interest rate.
Early withdrawals - Withdrawals before the term ends can seriously damage the amount of interest you earn, plus you’ll face penalty fees.
Want to know what a term deposit could do for your hard earned savings? Check out our term deposit comparison tool.