Term deposits 'are still a popular choice'

By Mozo ·

Australians have about $2.3 billion in term deposits at the moment, recent figures have revealed.

Data from Canstar Cannex's Deposit Account Star Ratings indicated that the amount placed into term deposits rose from $1.9 billion in February 2009.

Adam Beu, financial analyst with the firm, noted that some promotional rates rose as high as 7.75 per cent recently.

"We're seeing term deposits increase in popularity, partly due to an erratic sharemarket and partly due to bigger, brighter, shinier term deposit rates offered by the banks," he asserted.

This comes after Tim Farrelly, principal of specialist asset allocation research house Farrelly's, suggested in a Money Management article that term deposits may provide better yields than international equities.

Mr Beu noted that promotional rates are now down to the six per cent mark, with base rates close to the cash rate.

However, he added that there are still banks out there offering higher rates, an observation that may tempt some Aussies to head online to compare term deposits.

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