Of course the main attraction of a term deposit is the ability to hide away a certain amount of funds for a fixed period of time with a fixed interest rate. So the main questions when investing in one will most likely be: what are the interest rates and how long can money be locked away?
Well the good news is if you’re looking to stow funds away for a shorter period of time, then Illawarra Credit Union has some fairly competitive rates. For term deposits from 1-6 months you could be earning upwards of 1.70% interest on balances of $25,000. In fact, for 3 and 6 month terms the interest rate on offer is notably higher than average at the moment.
So if you’re planning to purchase a car in a few months time, or you want to boost your savings to put down a deposit on your first home, then this term deposit could be an option for you.
Or if you’re looking to put aside a more modest amount, say of $1,000-$3,000 for 3 months, you’ll be pleased to hear that the credit union’s 1.75% p.a. interest rate is currently one of the top 10 interest rates in the Mozo database for this term type.
Applying for a term deposit of 1 year or less should only take you about 10 minutes to do online (granted you’ll have to apply to become a member of the Illawarra Credit Union first, if you aren’t already one). To apply for term deposits longer than 1 year you will have to contact the credit union directly.
When it comes to how you receive your interest, you can choose to either have it paid to you monthly or on maturity, when the fixed term of the term deposit comes to an end. So if you fancy having a tidy sum of interest paid to you once a month to ease your bill payments or to put towards your groceries, you could opt to have the interest paid into your account every month.
Or if you’d rather let your interest build up with your savings and collect the neat interest gained with the rest of your funds when your term deposit ends, you can choose to have it paid to you when the term deposit matures. It should also be noted that the amount of interest you receive may vary, depending on whether you choose to receive it monthly or on maturity.