Looking for 5% interest? Term deposits offer top returns for savers

Image: Getty

Bank of Sydney has reported a surge in interest among investors for term deposits, “driven by the allure of security and substantial returns in the current economic landscape.”

The bank is reporting a significant shift, with term deposit interest rates now climbing towards the 5% level generally, which is luring more investors.

Chief banking officer at Bank of Sydney, Fawaz Sankari says, “This striking transformation underscores the substantial benefits that rising interest rates can offer savers. The shift in interest rates is resonating positively with individuals. 

“Australians, who have navigated a prolonged period of low interest rates, especially impacting those dependent on interest income, are now witnessing a tide of enhanced returns from their savings."

Bank of Sydney began offering 5.25% on its 12-month term deposit as of 28 September, 2023. On a $100,000 deposit with this product, there’s potential to generate $5,250 in interest, the bank says.

The question for most savers, however, is to consider whether they’d rather park their money in a high interest savings account, from which they more easily can withdraw their money without penalty, or indeed lock it away in a term deposit for a fixed period. 

For example, some savings accounts offer fairly good rates at present, including Ubank’s High interest Save Account at 5%, Macquarie’s Savings Account at 5.40% and Rabobank’s High Interest Savings Account at 5.60%. These rates are not fixed though and can change with fluctuations in the official cash rate set by the Reserve Bank.

By comparison, Bankwest offers 4.90% on a 9-month term deposit, ING has a 12 month term deposit at 5%, while Judo offers 5.20% on a 2-year term.

Bank of Sydney's 12-month term (at 5.25%) clearly stacks up well against these.

All up, understanding your short and long term money goals can help you decide which type of product would be more suitable. Our savings calculator can be a good first step in working that out.

But if you're ready to stash your money and earn a good rate of interest now, why not check out some of the ‘best’ term deposits below. You can also compare some ‘award-winning’ term deposits as selected by our Mozo experts.

Compare the top term deposits

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 101 term deposits.
Last updated 23 July 2024 Important disclosures
  • Mozo Expert Choice Badge
    Term Deposit

    5.25% p.a.
    6 months

    $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.

    Compare
    Details
  • Online Term Deposit

    5.00% p.a.
    1 year

    $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.

    Compare
    Details
  • SMSF Term Deposit

    5.25% p.a.
    6 months

    $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.

    Compare
    Details
  • Mozo Expert Choice Badge
    Term Deposit

    5.25% 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.

    Compare
    Details
  • Term Deposit

    3.70% p.a.
    6 months

    $5,000

    Yes up to $250,000

    Compare
    Details