Term deposits

Hi all! :hello:

So I'm interested in finding out about term deposits - how they work, are some better than others etc etc..

Please share your experiences! I know NOTHING!!!!

TIA :)

We did the easy thing and just went to our main bank who we were going to get our home loan through. At the time their interest rates were fairly good in comparison to others. I found keeping it with my bank very handy when it came to cash it out as they were just able to transfer it to one of our accounts straight away. We did check that if there was a need if would be able to access it earlier and were able to, but did not need to. It was important to have that as we were house hunting and it was our deposit. It also helped with the home loan app for the bank to easily see how much money we had.

Basically you just deposit a set amount of money for a term, like 6 months, 2 years etc. During that term you will receive interest paid at the one fixed rate, so they are great if you think interest rates on their way down, but not so great if on their way up. They are great as you cannot easily access the money, so you just leave it and forget about it for awhile.

oh ill br watching this thread, id like to learn more about them as well.

thanks Astrid :)

Anyone else care to share??!!

Don't know a great deal about them but we used one to keep money in just for the sake of showing we had a deposit, we only set ours for 1mth as weren't interested in the interest rate for now.

We stayed with our bank also which made it easier if needed to transfer money out.

Checked today and if we need to access some of the money BEFORE it matures we loose a portion of the interest but don't loose anything off our original balance.
Also if you do access the account you need to decide then and there what you do with the remaining amount, ie. transfer to another account or submit that again for the term deposit over a certain period.

HTH, probably not what your looking for but a lot of bank websites have details about their Term Deposits and rates of interest if you want an idea.

Astrid pretty much summed it up...

Interest can be paid monthly, half yearly, yearly or at term. You're more inclined to get a higher interest rate if it's paid at term and also if it's a longer term. Interest can be paid back into the term deposit (so you are then earning interest on your interest) or into another nominated account. There is usually a fee if you have to access the funds before term.

I think the minimum term is 1 month and longest is usually 5 years. They are great if you have a lump sum sitting around waiting to be used i.e., house hunting, as it is a fixed rate and secure investment.

Can you tell I work for a bank? :lol:

Also the interest is deemed to be income by the ATO and as such is taxed. Something some people forget. ;)