Types of Term Deposits

Before you decide that a term deposit is for you, it's worth thinking about what kind of account you want to keep your funds in. Whether you're a short-term saver or in it for the long haul, there's likely to be a term deposit option that fits your needs.

We've broken down the different kinds of common term deposits to help you decide.

Top tip: Try opting for a short term deposit with a rollover option. That way, you'll have the opportunity to withdraw - or deposit - more funds when the original term runs out, but you also have the option to extend and save for longer. Just make sure you check the rollover rate is still competitive!

Top tip: Consider laddering your long-term deposits. This involves splitting your money into multiple deposits with staggered maturity dates, giving you more frequent access to your money while still benefiting from higher rates.

Intro rate savings accounts offer introductory interest rates for a set period, usually between 3 to 6 months. Some of these intro rates can be higher than even some bonus rates, although bear in mind that this is usually temporary. After this period, the account normally reverts to a standard variable rate.

Intro rate savings accounts features include:

• High introductory interest rate
• Limited time period for the high rate
• May have conditions to meet during the introductory period
• Useful for short-term saving goals.

These accounts can be a good option if you have a short-term savings goal, but it's important to check what the ongoing rate will be after the introductory period ends.

Bonus saver accounts give you a higher interest rate when you meet certain conditions each month. These conditions often include making regular deposits, limiting withdrawals, or maintaining a minimum balance.

Bonus saver accounts features include:

• High interest rate when conditions are met
• Encourages regular saving habits
• May have restrictions on withdrawals
• Often requires a linked transaction account.

Bonus saver accounts could be a good choice if you're committed to growing your savings and can consistently meet the account conditions.

There’s no harm in introducing your children to the world of savings at an early age. A kids savings account is usually for children under 18 years and just like a basic savings account the balance earns monthly interest. 

However, some youth saver accounts will start in the teen years and end well into adulthood, some going as far as 35.

Most major banks, credit unions and building societies in Australia have accounts specifically designed for children. Read the Mozo guide on savings for children to help bring up savings-savvy kids!

Some characteristics of kids savings accounts are:

• Higher interest rates compared to adult savings accounts
• Often have no or low fees
• Age restrictions (e.g., under 18 years old)
• Some accounts offer fun features to engage children in saving.

These accounts can be a great way to teach children about money management and the benefits of saving.

Business savings accounts are designed for companies and organisations to manage their excess cash and earn interest on their funds.

Key features of business savings accounts include:

• May offer tiered interest rates based on account balance
• Often have higher minimum balance requirements
• May be linked to business transaction accounts.

These accounts can help businesses earn interest on their working capital while maintaining easy access to funds.

While both savings accounts and term deposits are ways to save money and earn interest, they have some important differences:

The main differences include:

• Access to funds: Savings accounts usually (depending on rate conditions) offer easy access to your money, while term deposits lock your funds away for a set period.
• Interest rates: Term deposits interest rates are fixed, meaning you know exactly what you get for the agreed upon term. Savings account rates, on the other hand, can change as the provider sees fit.
• Minimum deposit: Term deposits usually require a higher minimum deposit than savings accounts.
• Flexibility: Savings accounts offer more flexibility in terms of deposits and withdrawals.

For a more in-depth look at the differences, check out our guide on savings accounts vs term deposits.

Choosing the right savings account depends on your individual financial situation and goals. Don't be swayed by high introductory rates alone—know how the account fits into your overall financial strategy.

Ready to compare? Check out providers on our savings account main page.