Mozo guides

Term deposit tricks and tips

green piggy bank wanting to learn more about term deposits

You’ve done the hard work of saving and squirrelling away every spare dollar, decided a term deposit is the best place to park your money and now you can kick back and forget about it, right? Wrong!

A term deposit may be a low maintenance saving strategy, but that doesn’t mean you can just leave your hard earned savings to look after themselves. There are still some tricks you can keep up your sleeve to help you maximise the earning potential on your rainy day fund while it’s put away in a term deposit. And on the other side of the coin, there are some term deposit traps you should look out for as well.

Check them out below.

Term deposit tricks

putting money in a safe account

Your main goal in opening a term deposit is probably either to earn a steady return, or to keep your stash safe. Or maybe you want to do both. Here are a few tips to get the most out of your term deposit.

  • Create a budget. If you’re locking a chunk of your money away in a term deposit, you should first have a strategy to live without that money, which might mean:
  • Tighten up your everyday budget. Not having access to that lump sum of money might mean you need to cut back on some of your more frivolous spending, and keep your accessible cash for really necessary costs, like rent or groceries.
  • Keep track of your money. Your bank will contact you when your term deposit is about to reach maturity, but it’s also a good idea to set your own reminders. Plus, you’ll want to have a plan ready for what you’re going to do with the funds - if you delay deciding too long, you might accidentally find yourself locked into a rollover term.
  • Choose the right term for you. Usually, a longer term will offer a better interest rate, but that won’t matter if you have to withdraw from your deposit a few months in. Pick a term that you’re confident you can stick to.
  • Maximise your balance. The more money you put in upfront, generally the more interest you’ll get out. So check the nooks and crannies of your budget and plump up your initial deposit with any extra funds that are going unused.
  • Stagger your term deposits. If you have multiple term deposits, try staggering the maturity dates so you’ll get your money back at different times. This can be a great strategy for retirees or people living off their savings because it’s almost like receiving a regular paycheck and can help you manage your budget by giving you gradual access to funds.
  • Find the best interest rate before you lock in. A term deposit lasts for a fixed term, at a fixed rate, so whatever deal you choose, you’ll be stuck with it for a minimum of a month. That means it’s important to find the most competitive term deposit offer around, so you can get a high interest rate and get earning so extra money.

Common term deposit traps

smashed piggy bank fell for term deposit traps

Sometimes, the best offence is a good defence, so now that you know the tricks for making your term deposit work harder for you, let’s cover some of the common mistakes people make when using a term deposit as a savings strategy.

These pitfalls will lower the amount of interest you earn, so don’t get tripped up and lose that extra money you could earn.

  • Early withdrawals. This is the number one trap when it comes to term deposits - and it can damage how much interest you earn. When you withdraw early, not only will you pay penalty fees, but the bank can also reduce the amount of interest you’ll earn. So once you put your money away in the term deposit it’s hands off until the maturity date.
  • The 31 day notice period. It’s become more and more common for banks to require a 31 day notice period before you can make an early withdrawal on your term deposit. If you’re withdrawing because an emergency has cropped up, this could be a problem. Combat the notice period by having a different emergency fund in reserve, outside your term deposit.
  • Rollover ‘deals’. If you forget to make arrangements for when your term deposit matures it may rollover into a low interest term. Once it does, you’ll be locked in for the length of that term and penalty fees will apply for withdrawals, the same as your original deal. With certain banks, your money can even be shifted into a ‘holding account’ where you won’t earn any interest at all.
  • Sticking with your current bank because it’s easy. Accepting the term deposit on offer from your regular bank without comparing other options is a big mistake. It could mean missing out on lots of potential interest. Shop around before you choose somewhere to stash your cash, but remember to check that the bank will pay your term deposit interest into a savings account with your regular bank, as not all offers have this option - some will instead require you to have a savings account or bank account with the same bank for interest to be paid into.
  • Interest rate envy. The grass is always greener on the other side. Realising that you’ve locked in a rate that’s not as good as it could have been is really disappointing and could cost you big in the long run. So make sure you compare interest rates and find the best deal around before locking in.

Handy term deposit tools

happy piggy know what to do with term deposits

Does that seem like a lot of work? Well, luckily, we’re here to help, and we have a bunch of great tools to make getting hold of the best possible term deposit as easy as pie. Here’s what you can do: 

Compare the range of term deposit offers available with our comparison table below. Alternatively, take a look around our term deposit guides to increase your knowledge.

Term Deposit Comparison Table - last updated 25 May 2024

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

    5.00% p.a.
    1 year


    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)

  • Online Term Deposit

    5.00% p.a.
    1 year


    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.

  • Term Deposit

    4.90% p.a.
    6 months


    Yes up to $250,000

    Competitive fixed rates across investment terms ranging from 1 month to 5 years. No set up or establishment fees. $1000 minimum investment.

Maria Gil
Maria Gil
Money writer

Maria Gil writes across all of our personal finance areas here at Mozo. Her goal is to help you think smarter about money and have more in your pocket. Maria earned a journalism degree in Florida in the United States, where she has contributed to major news outlets such as The Miami Herald. She also completed a masters of digital communications at the University of Sydney. When Maria isn’t busy with all things finance, you can find her tucked away reading fantasy books. She is also ASIC RG146 (Tier 2) certified for general advice.

* 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.