Time to save? Term deposit rates are quietly on the rise

calculating which term deposit is best for me

In the last couple of months interest rates for term deposits have been increasing, in some cases by about 20 basis points. In January alone there were 47 increases recorded on Mozo’s database. 

If you aren’t too familiar with the world of finance, a term deposit is a bit like a savings account but once money goes in, it stays for a set period before you can take it out. Typically a term deposit is a safe place to stash your money while it earns interest during this time and as such, is seen as a low-risk investment.

As mentioned, the interest rates of term deposits have been steadily going up, especially for longer terms.

Mozo’s banking expert Peter Marshall believes this has to do with the Federal Reserve’s plan to lift the official cash rate this year. Many banks are already increasing their rates prior to the Reserve’s expected announcement. 

“Banks are also thinking they will need to start getting more deposit customers, so there’s some increasing competition there. I think that term deposit rates will be under the same pressure that fixed home loan rates are, and continue to creep steadily higher,” he says.

So let’s take a closer look at changing rates.

What are some notable term deposit increases?

In the last couple of months, rates for longer term deposits have seen big growths, some as big as 20 basis points. 

For example, Judo Bank also made a number of interest rate increases putting several of its term deposits in the top spots in the Mozo database.

Some of its current competitive rates are:

  • 1.15% p.a. for a six month term
  • 1.15% p.a. for a 1 year term
  • 1.45% p.a. for a 2 year term
  • 1.55% p.a. for a 3 year term
  • 1.85% p.a. for a 4 year term
  • 1.95% p.a. for a 5 year term

However, Judo Bank isn’t the only one increasing their rates. According to Mozo’s database some of the banks who have recently raised their rates include:

Term deposit comparisons on Mozo - last updated 14 May 2022

Search promoted term deposits below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.50% p.a.
    2 years
    $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 2021 for Term Deposits.

    Details
  • Mozo Expert Choice Badge
    Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    3.00% p.a.
    2 years
    $5,000
    Yes up to $250,000

    Competitive rates and fast online application for one year term deposit. Start investing with as little as $5,000 up to $500,000. No account keeping or set up fees to pay. Option to have interest paid at maturity. MyLife MyFinance is part of the Challenger Group.

    Details
  • Term Deposit
    interest rate
    Minimum deposit
    Govt Deposit Guarantee
    0.65% p.a.
    3 months
    $10,000
    Yes up to $250,000

    $0 Set up and no ongoing account-keeping fees. Interest rate depends on balance amount. Optional 3,6,9 or 12 month terms. Balances from $10,000.

    Details

* 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.