Beleaguered Aussie savers will be glad to hear that it's not all bad news when it comes to term deposit interest rates - although it's not great news either.
To help Aussies hit their savings goals, UBank has today announced it will be increasing its 1,3, 9 and 12 month personal term deposit rates.
The new rates will be offered to customers who sign up for a term deposit from today or customers whose existing term deposits mature and roll over after today.
Plus, when a UBank customer’s term deposit reaches maturity and rolls over for another term, they’ll also be treated to a Loyalty Bonus of 0.10% on top of the current standard rate.
UBank new term deposit rates for 1, 3, 9 and 12 months
So to find out what this new rate rise will mean for Aussie savers, we decided to pull out our term deposit calculator.
Say you decided to deposit $10,000 at the average 12 month term deposit rate of 2.51%, within 12 months, you’d have a balance of $10,251.
Now if you invested the same amount with the new UBank 12 month rate of 2.75%, your new balance would be $10,275 - a difference of $24.
“While it’s great to see UBank sharpening their rates for Aussie savers, there are some better rates out there in the market,” said Mozo Product Data Manager, Peter Marshall.
“At the moment, there are a few providers in the Mozo database offering rates of as much as 3%, so it’s always a good idea to shop around before signing up to latest offer.”
On that note, finding a top term deposit can go beyond securing a great rate. While that’s important, some other things to consider include:
- Having a seperate emergency fund - One thing you need to keep in mind about term deposit is that early withdrawals are deeply frowned upon, meaning you may have to pay a hefty fee if you decide to take your money out early. You can avoid this by setting up a seperate emergency fund in a a high interest savings account, so you can freely dip into your stash whenever you need it.
- Planning ahead - While your bank will contact you when your term deposit is about to hit maturity, you should still set your own reminder beforehand. You’ll also need to have an idea of what you plan to do with the cash after your term ends, otherwise, your balance may be automatically rolled over into a new term and sometimes not at the best rate.
- Maximise your balance - Generally, the bigger your balance, the more interest you’ll earn. So it’s a good idea to thoroughly scope out your budget to make sure you’re putting in as much as possible. Just make sure it’s definitely money you can do without until the term deposit matures!
And if you’d like to take a peek at some other term deposit offers, you can check out our term deposit comparison tool.