Term deposit rates for amounts over $10k

If you’re considering what to do with a large sum of cash, a term deposit represents a safe investment choice. And the bigger the deposit, the higher the rate of interest you could earn.

There are plenty of options when it comes to term deposit accounts, and relatively competitive interest rates when your investment is over $10,000.

Your money doesn’t have to be locked away for an extended period of time to be profitable. You can open a term deposit account for one month or up to five years depending on your investment goal.

You could also turn the interest generated by your term deposit into income by choosing the frequency of interest payments.

Depending on the term, you could opt for interest on your $10,000 investment to be paid monthly, quarterly, half-yearly, annually or at maturity.

But it’s worth keeping in mind that if you want interest to be paid more often, the fixed interest rate will generally be lower than if you left interest until maturity.

Opening a $10,000 term deposit is a straightforward process that takes under 10 minutes to complete. This can be done online or at a branch.

The basic information you would need to provide is:

• Identification (passport, driver’s licence, proof-of-age and/or Medicare card)
• Australian residential address
• Tax file number (TFN) or a TFN exemption

If you’re a tax resident in another country, you may need to provide a foreign tax number.

In addition to this, you would need the $10,000 deposit and, depending on the bank, an existing (or new) bank account.

You can transfer money into your term deposit account via direct debit or deposit, BPay or cheque. Your bank will outline the options available to you for this purpose.

Some banks also give you the option of making additional deposits within a specified timeframe (e.g. within a week of opening your term deposit), while others let you make deposits at any time.

You can withdraw money from your term deposit, but beware: this does come at a price if you do it prior to maturity (or the end of the term).

You may need to give 31 days’ notice, and your interest rate could be reduced. So, to get the best return on your $10,000 investment, aim to leave your principal alone until maturity.

When your term deposit matures, you have a few options of how to proceed, such as:

• Reinvest your original $10,000 contribution, plus the interest earned, into a new term deposit
• Reinvest the original $10,000 and deposit the interest earned to your nominated account
• Close the term deposit, with the original $10,000 investment and the interest deposited to your nominated account

It’s worth noting that if you choose to end your term deposit early, the interest rate will generally be reduced. The size of the reduction will depend on how much of the term you still had left to go.

Give serious thought to this action, given the effort you went to searching for interest rates over $10,000.

Investing in a term deposit can have several benefits, such as:

• No monthly account fees
• No application fees
• Fixed interest rates

Another advantage is that a $10,000 term deposit would be covered by the government guarantee. Deposits under $250,000 are protected if a bank, building society or credit union collapses.

If you have more than $250,000 in a term deposit with the one bank, for example, then only up to $250,000 of your principal is guaranteed.

If you’ve got more than $250,000 and you wish to invest in a term deposit, you could consider dividing your money between multiple term deposits and banks.