Australians looking for a safe place to stash their savings could be forgiven for glancing at term deposit rates with a weary eye, especially given the fact that, according to Mozo data, there have been 65 cuts from providers already this month.
In fact, term deposit rates have been down across the board since November 2016, with the largest drop occurring in the 2 year term category - the average rate falling from 2.75% to 2.57% in just a year.
And with the Reserve Bank likely to keep interest rates at record low levels, at least in the short-term, Mozo’s Product Data Manager Peter Marshall has urged savers do their research before locking in a rate.
“Given the low rates, it’s even more crucial for Australians to shop around and compare term deposit rates in order to grab the best possible return for their money,” he said.
“Just by putting in a little extra legwork, savers could potentially be pocketing hundreds of dollars in additional interest over the life of a term deposit.”
Despite the general downward trend, savers are still able to find value in some of the longer term offers on the market, with the best term deposit rates currently in the Mozo database for three, four and five year terms all above 3.00%.
With a current interest rate of 3.25%, online bank RaboDirect’s five year term deposit is 0.50% above the average rate for the same term in the Mozo database, and while that might not seem huge, the additional interest can really add up over five years.
According to the Mozo term deposit calculator, a balance of $20,000 invested in the RaboDirect term deposit would end up making an extra $500 in interest compared to the same amount invested with the Mozo database average of 2.75% for the same term.
Interested in comparing term deposits for yourself? Check out the Mozo term deposit hub which compares offers from over 60 different banks.