The term deposit war has just started. Is now the time to pick up a good interest rate?
![hands checking out dome graphs](https://cdn.mozo.com.au/images/atwood/13942/hands%20checking%20out%20the%20difference%20between%20some%20graphs.jpg)
Since the first RBA rate hike in May, we’ve seen financial institutions increase term deposit rates. In fact, in June alone we saw a total of 615 increases in our database.
But according to Mozo’s in-house banking expert Peter Marshall, “The term deposit wars have just started.” He says it’s likely we’ll see the space heating up in the next 12 months.
Before the May RBA hike, many banks, especially big banks, were offering “embarrassing rates” where customers were offered almost nothing for any term, says Marshall.
That’s not the case anymore.
Below, you can see that the overall average of term deposits has increased throughout in the last year, slowly returning to rates from 2018. At a glance, the numbers may seem a bit low, but still, banks like AMP and Judo offer rates above a ‘3’, with several of the longer term deposits sitting above a ‘4’
Term Deposit Interest Rate Average
July 2022 | July 2021 | July 2020 | July 2019 | July 2018 | |
1-year term | 1.88% | 0.50% | 1.11% | 2.07% | 2.50% |
2-year term | 2.28% | 0.53% | 1.07% | 2.06% | 2.61% |
3-year term | 2.42% | 0.54% | 1.06% | 2.02% | 2.67% |
4-year term | 2.36% | 0.53% | 1.04% | 1.99% | 2.71% |
5-year term | 2.41% | 0.56% | 1.07% | 2.02% | 2.78% |
In 2018, the average for a 1-year term sat at 2.50% p.a. which is higher than the current 5-year term average. Several 5-year terms in our database currently start with a ‘3’. So it might assume that if rate hikes continue and we reach the same 1.50% cash rate of 2018, we could be seeing more 1-year terms starting with a ‘3’.
In fact, after June’s cash rate increase, several banks also announced increases to shorter term deposits. The big four now offer 11 to 15 month terms with a 2.50% p.a. rate, helping push the average closer to what it used to be in 2018.
If you have a large sum of money sitting in your savings account that you don’t need anytime soon, it might be worth looking into shorter term deposits.
Is it time to get a term deposit?
![people measuring their options](https://cdn.mozo.com.au/images/atwood/13942/people%20measuring%20up%20their%20options.jpg)
Westpac economists predict that the RBA isn’t done hiking the cash rate and will continue to make increases to the end of the year.
So term deposit rates might continue to move up.
“It’s worth waiting another couple of months. Either that or put some money on a six-to-twelve month deposit now and take advantage of better rates when it matures,” says Marshall.
“I’m not sure how much further they’ll go up or whether the jumps will be as big as we’ve seen, but my feeling is it’s better to wait just a little bit longer right now. The competition has only just started to heat up.”
Term deposits to keep an eye on
While big banks have begun to offer higher rates on term deposits, they aren’t the ones offering the highest.
At the time of publication, our database's current term deposit leaders are Judo Bank, AMP Bank and Challenger Bank. However, the competition is picking up, so we might be adding another bank to the list soon.
Judo Bank
Term Length | Interest Rate (p.a.) |
1-year term | 3.25% |
2-year term | 3.75% |
3-year term | 4.10% |
4-year term | 4.25% |
5-year term | 4.35% |
AMP Bank
Term Length | Interest Rate (p.a.) |
1-year term | 2.90% |
2-year term | 3.65% |
3-year term | 3.90% |
4-year term | 4.05% |
5-year term | 4.15% |
Challenger Bank
Term Length | Interest Rate (p.a.) |
1-year term | 3.05% |
2-year term | 3.35% |
3-year term | 3.80% |
4-year term | 4.00% |
5-year term | 4.00% |
As you can see there are plenty of good options around for term deposit savers right now.
If you want to stay up-to-date with the latest term deposit news, check out our term deposit news page. Alternatively, you can start comparing term deposits below to find one that works for you.
Term deposit comparisons on Mozo
-
Mozo experts choice awards won:
- Term Deposit - 2024
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.
CompareCompareTerm Deposit
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.
- interest rate
- 5.25% p.a.
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $2,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
Read our Mozo Review to learn more about the Judo Bank Term Deposit
-
Term Deposit - Online only
5.15% p.a.
6 months$1,000
Yes up to $250,000
Looking for returns that return? Invest as little as $1,000 or as much as $1,000,000. Apply online today in as little as 5 minutes. Protected by the Australian Government’s Financial Claims Scheme up to $250,000.
CompareCompareTerm Deposit - Online only
Looking for returns that return? Invest as little as $1,000 or as much as $1,000,000. Apply online today in as little as 5 minutes. Protected by the Australian Government’s Financial Claims Scheme up to $250,000.
- interest rate
- -
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $1,000,000.00
- Can interest be paid to another bank?
- no
- Automatic rollover
- yes
Read our Mozo Review to learn more about the Bank of Sydney Term Deposit - Online only
-
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.
CompareCompareSMSF Term Deposit
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.
- interest rate
- 5.25% p.a.
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $2,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
-
Mozo experts choice awards won:
- Term Deposit - 2024
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.
CompareCompareTerm Deposit
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.
- interest rate
- 5.25% p.a.
- Minimum deposit
- $1,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $1,000.00
- Maximum deposit
- $2,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
Read our Mozo Review to learn more about the Judo Bank Term Deposit
-
Term Deposit
3.70% p.a.
6 months$5,000
Yes up to $250,000
CompareCompareTerm Deposit
- interest rate
- 4.60% p.a.
- Minimum deposit
- $5,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $5,000.00
- Maximum deposit
- $1,999,999.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
Read our Mozo Review to learn more about the Commonwealth Bank Term Deposit
-
Term Deposit
4.25% p.a.
1 year$5,000
Yes up to $250,000
No set up, monthly service or management fees & choose to invest from $5,000 or more
CompareCompareTerm Deposit
No set up, monthly service or management fees & choose to invest from $5,000 or more
- interest rate
- 4.25% p.a.
- Minimum deposit
- $5,000.00
- Govt Deposit Guarantee
- Yes up to $250,000
- Minimum deposit
- $5,000.00
- Maximum deposit
- $2,000,000.00
- Can interest be paid to another bank?
- yes
- Automatic rollover
- yes
Read our Mozo Review to learn more about the Westpac Term Deposit
Your selected term deposits
Your selected term deposits
Your selected term deposits
Your selected term deposits
Your selected term deposits
Your selected term deposits
* Different interest rates apply to different amounts or different interest payment frequencies.
^See information about the Mozo Experts Choice Term Deposit Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.