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A 12 month term deposit could see the growth you've been looking for. To find a year-long term deposit, use the filters to compare and calculate interest rates, returns, fees and more with RateCity.

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Mark Bristow

Updated on

07 Nov, 2025

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A year can be a long time in finance, but if you’ve done your homework, investing in a 12-month term deposit can help you to maximise your wealth.

Unlike a savings account or a home loan, where you may get to choose between a variable or fixed interest rate, term deposit interest rates are fixed in advance. If you look around and find a good deal, you can lock your term deposit interest rate in for a year.

Who are 12-month term deposits good for?

If you have long-term saving goals, such as saving for a home loan deposit or an overseas holiday, a 12-month term deposit could help you achieve those goals.

Longer term deposits of 12 months or more often have higher interest rates than shorter term deposits of three or six months. Some financial institutions will offer an even better term deposit interest rate if you are willing to invest a larger sum.

It's important to compare different options before making an application, and work out if a 12-month term deposit would suit your financial goals.

What should I know about 12-month term deposits?

In banking circles, a 12-month term is considered a short term deposit, and anything longer is considered a long term deposit. In most cases, you won’t be able to easily access the money you deposit during the 12-month term without incurring penalties such as fees. Keep this in mind when you’re planning your budget.

Some 12-month special term deposits feature higher interest rates or other introductory offers to attract new customers. While these specials can be rewarding in the right circumstances, keep in mind that these special offers likely won’t last forever. For example, if you received a special high interest rate as an introductory bonus on a term deposit, if you were to roll over your savings at the end of the term, you may revert to a lower interest rate for the next term.

When the 12-month special term deposit reaches the end of its term and matures, you’ll have some choices to make. You could withdraw the money to use elsewhere, exercise the rollover option to automatically reinvest the money with the same bank, or place the money in a different term deposit, perhaps with a different bank. It’s important to compare the different options before making a decision to you can be confident that you’re making the best choice for your situation.

What are the costs and benefits of 12-month term deposits?

Many term deposits can be opened for free, with just a few online clicks. However, some banks may insist on a personal approach and require that you visit a branch to apply. There is usually no limit to the number of term deposits you can open.

You may need to deposit more than a minimum amount (e.g. $1000 or more) to open a 12-month term deposit. This interest you earn on this amount may be paid monthly, quarterly, biannually, annually or on maturity (at the end of the term). In some cases this interest may be paid back into your term deposit, where it can earn compound interest, or it may be paid into a bank account of your choice to help support your household budget. Term deposits that pay interest more frequently or offer compound interest may have lower interest rates than term deposits that pay interest on maturity. It’s important to compare the available options to make sure you choose a term deposit that should suit your needs.

In many cases, you won’t be able to take money out of your term deposit before the 12-month term ends. Some term deposits do allow early withdrawals, but these may mean paying penalty fees or receiving lower interest rates. If possible, budgeting to avoid an early withdrawal penalty may be able to help you get the most out of a 12-month term deposit.

Are 12-month term deposits safe?

If you’re worried about the safety of your term deposit, in the unlikely event that your bank collapses, the Australian government guarantees deposits of up to $250,000 in authorised deposit-taking institutions (ADIs).

Alex Ritchie

Personal Finance Editor

Alex Ritchie was a Personal Finance Writer and Editor at RateCity, and has been writing about Australian finance for over six years. Her expertise and passion covers loans, credit, superannuation, and closing the gender pay gap, and she aims to help young Aussies to overcome their financial apathy. Alongside RateCity, Alex has been published in numerous publications, including Australia's Money Magazine, Business Insider, Lifehacker Australia, and in health via NPS MedicineWise.

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, target market determination fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

Who are 12-month term deposits good for?

If you have long-term saving goals, such as saving for a home loan deposit or an overseas holiday, a 12-month term deposit could help you achieve those goals.

It's important to compare different options before making an application, and work out if a 12-month term deposit would suit your financial goals.

What should I know about 12-month term deposits?

What are the costs and benefits of 12-month term deposits?

Compare 12 month term deposit rates

Providers we compare

On this page

Who are 12-month term deposits good for?

What should I know about 12-month term deposits?

What are the costs and benefits of 12-month term deposits?

Are 12-month term deposits safe?

Share this page

Latest term deposits articles

What happens when a term deposit matures?

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Did you find this page helpful?

On this page

Who are 12-month term deposits good for?

What should I know about 12-month term deposits?

What are the costs and benefits of 12-month term deposits?

Are 12-month term deposits safe?

Share this page

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