Why term deposits have become a star savings performer in 2022

With an increase in interest rates from the Reserve Bank of Australia (RBA), many are starting to see this as a better time than ever to start pumping money into their savings accounts. 

Term deposits—where you lock away your money for a set period of time to gain higher interest—have similarly seen a boom in interest rate returns. 

In July of 2021, the average rates for a 2-year term were at just 0.53%. But a year later, the picture is so much better for savers.

The average rate had increased to 2.28% as of July 2022.

Not only that, Mozo’s own analysis showed that as of November, term deposits like Judo and AMP are currently offering term deposit interest rates of over 4% for 1-5 year terms.

Overall, the increase in interest rates has created a safe place for Australians to park their savings and grow their wealth whilst tougher living conditions continue.

But I already have a savings account that I like, why should I consider a term deposit heading into 2023? 

You might be wondering; “If I already have a high-interest savings account, are term deposits worth considering?” 

Splitting your savings through multiple accounts can be a good strategy if you have the cash to do it. That being said, it isn’t always the best choice for everyone. 

If you’re young or tight on cash, you may find it better to keep your money in a savings account. The advantage of this is that you can access your savings when you need them but at the cost of a lower interest rate. 

However, if you’re older or generally just have enough spare cash in your pocket, you may find it more helpful to store it away in a term deposit to reap the benefits of higher interest rates over a set period. 

Additionally, having a savings account for more immediate situations and a term deposit for a long-term goal can help you define savings buckets that can help organise your money better. 

Say, for instance, you want to save up for a car deposit. While your term deposit grows the money needed for your goal, keeping a savings account for everyday transactions can help with last-minute purchases you have for your everyday life.

Interested? Check out our comparisons of term deposit accounts and start saving.

Term deposit comparisons on Mozo - last updated 23 June 2024

Search promoted term deposits below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    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.

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    Details
  • Mozo Expert Choice Badge
    Term Deposit

    5.00% p.a.
    1 year

    $1,000

    Yes up to $250,000

    Enjoy a competitive fixed interest with the choice of 1 month to 5 year terms. Start with as little as $1,000. Interest paid monthly, quarterly, half yearly or yearly. Receive a 0.10% loyalty bonus when you automatically reinvest your Term Deposit before maturity. (Terms and Conditions apply)

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  • Online Term Deposit

    5.00% p.a.
    1 year

    $5,000

    Yes up to $250,000

    No set-up or account keeping fees. Deposits up to $250,000 per customer are guaranteed by the Australian Government. Mozo Experts Choice winner for Term Deposit 2022.

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    Details
  • Term Deposit

    5.25% p.a.
    4 months

    $5,000

    Yes up to $250,000

    Invest as little as $5k to grow your savings with our attractive Term Deposits rates. No establishment or ongoing fees with interest paid at maturity. Mobile app available. T&Cs apply.

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    Details
  • 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.

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* Different interest rates apply to different amounts or different interest payment frequencies.

^See information about the Mozo Experts Choice Term Deposit Awards

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