Diligent savers deserve to be rewarded and in this climate there are plenty of great places to stash your cash and super-size your interest. If you won't need to access your savings in the short to medium term, a six month term deposit could be right for you.
How much interest will I earn?
The interest you earn on your term deposit will depend on the interest rate of the banking provider you choose, the length of your term deposit and the frequency of interest payments. Work out how much you can earn on your term deposit savings with our handy term deposit calculator.
Is there a penalty for accessing my term deposit before the full term is up?
Unfortunately yes If you want to take your money out early you'll typically face a 'break fee' and a deduction of some, or all of the interest you earned. If you need ready access to your cash, a high interest savings account could be a better choice or look at shorter fixed terms like 3 month or 1 month term deposits.
Should I make additional savings during the term deposit time?
It will depend on your provider whether you're able to make additional contributions to your term deposit, but typically not. Keeping up the savings habit is a good idea, but you'd be better off with a high interest savings account where some providers reward you for making regular extra contributions.
I made two attempts to open a term deposit on-line with this lot. First attempt was slow as the flotilla of intrusive questions had me searching for various documents. I was logged out on the 7th page of the questions with the software claiming...
I made two attempts to open a term deposit on-line with this lot. First attempt was slow as the flotilla of intrusive questions had me searching for various documents. I was logged out on the 7th page of the questions with the software claiming that there "...was no activity for an extended period...". None of my input was saved! I gritted my teeth and restarted and I was really quick this time. On the 7th page the moronic software again claimed that there was "...no activity for an extended period...", and logged me off. This was absolute nonsense. Never again. I logged on to Judo Bank and invested my money there without a problem in just a few minutes.
Best rates! But, what's the trickery with interest "paid at maturity" on a 3 year term deposit? Later in the text it says I can select monthly, yearly etc. payout. Are you seriously trying to trick customers out of Compound Interest? and if so,...
Best rates! But, what's the trickery with interest "paid at maturity" on a 3 year term deposit? Later in the text it says I can select monthly, yearly etc. payout. Are you seriously trying to trick customers out of Compound Interest? and if so, are you then misrepresenting the interest rate? Maybe it's time to review your offers and write some clear product details.
When they visit a branch people do not want to be kept waiting in line for so long. For god's sake put another staff member on. It's not all about profits, there is service which this bank seems to be lacking. I recently went to a branch and they...
When they visit a branch people do not want to be kept waiting in line for so long. For god's sake put another staff member on. It's not all about profits, there is service which this bank seems to be lacking. I recently went to a branch and they had people waiting out the door, two tellers on all other staff were in group talking. Not a good look.
Picture this… a stress free, risk free, fee free way to make money on your savings. It may sound too good to be true but a six month term deposit offers just that. It is ideal for those with a large amount of cash who aren’t too sure what to do with it.
With a term deposit the interest rate is fixed on your investment therefore you can sit back, relax and watch your funds grow for half a year. Most big banks and credit unions offer six month term deposits, but be sure to shop around for the best rate on the amount you are investing.
The Australian Government guarantees term deposits of up to $250,000 with Authorised Deposit-taking Institutions (ADIs) such as your bank, credit union or building society. So your pennies are safe if anything unexpected happens to your ADI
You can make realistic financial goals, as a fixed interest rate allows you to calculate exactly how much you will earn by the end of the six months. Plug some figures into the Mozo savings goal calculator to see for yourself
No work required, sit back and watch your funds grow
Ability to re-invest at the end of the term, so you don’t miss out on a rise in interest rates unlike a long- term deposit
No risks of seeing your funds decrease such as with investments in shares or property.
Disadvantages to six month term deposits:
Be aware hefty penalties apply for withdrawing the funds before the six months is up
Lower interest rates than for a long-term deposit
You can’t top up the funds until the term has matured
When is the interest paid?
It is important to discuss with your financial institution or credit union how often or when interest will be paid on your six month term deposit. Interest can be paid monthly, quarterly, semi-annually, annually or on maturity. With a six month term deposit it is likely to be calculated monthly or at the end of the term.
Remember: When you are investing for only half of the year with a 4% p.a interest rate, you will earn 2% on your deposit. E.g. If Mrs Jones invests $10,000 in a six month term deposit with a 4% interest rate paid at maturity, she will earn $200.
You don’t need to be a mathematician to work out how much interest you will earn! Let the Mozo term deposit calculator do all the hard work.
What happens to a six month term deposit at maturity?
Withdrawal: By all means you can withdrawal your money when the term has ended and go out and spend up big!
Rollover: Some banks offer the option to automatically rollover your investment with them for another term
Reinvest: Grow your funds even further. The market may have changed since you first opened up the term deposit so shop around online and find a high interest rate and reinvest those savings. Check out the best term deposits here!
What you need to apply for a six month term deposit:
Name, address, phone number
Proof of identification e.g. driver’s licence plus Medicare card
Your tax file number
BSB and account number of the bank account from where the funds will be transferred from
Details (if any, such as your partner) of any other people who will be noted on the Term Deposit.
Sadly for Mr Jones his great grandmother from Italy, who he’s never met, has passed away. To the 30 year olds surprise, he has been fortunate enough to inherit a whopping $100,000! With mixed emotions he heads to the pub and shouts his mates a few rounds of drinks and over beers they discuss what he should do with his inheritance.
Being a sensible and conservative man when it comes to money, Mr Jones learns that the safest place for this big wad of cash is a term deposit. He plans on popping the question to his girlfriend in the next few months so he knows a wedding is on the cards and they aren’t cheap. If all goes to plan he’ll need to access the money in six months.
Looking online Mr Jones learns that he can secure a high interest rate of 3.75% with a six month term deposit, therefore maximising his wealth before the ‘big day’. When the deposit matures Mr Jones would have earned $1,875 in interest that can go towards a beautiful diamond ring.