How are term deposits rates doing? AMP Bank offers highest 5-year term

A term deposit is a low-risk investment option offered by many banks, mutual banks and credit unions. The deposit lets you earn interest on a large sum of money at a fixed rate for a specified period of time. That can be anywhere from one month to five years. After you put money in a term deposit you can choose how to have your interest paid: monthly or at maturity.

You’re in luck! Every year we announce the Mozo Expert Choice Awards^ where we crown the best of the best as winners. Some of the banks with the highest rates above have actually won awards for best term deposits.

Yes, any interest earned is considered income and you’ll need to include this on your tax return for the financial year in which it was paid.

Term deposits have fixed interest rates so you’ll always know how much you’ll earn over the determined term period, but the trade off is that to earn that interest you won't be able to access that money (without penalty). On the other hand, savings accounts have variable interest rates which can be changed by your bank (up or down) at any time and you’ll also have easier access to your money.