Find term deposits for amounts over 250k

Growing your nest egg is made easier through a term deposit with a high balance, but there are some risks involved when your balance exceeds $250,000.

Term deposit providers will often set a minimum term deposit balance amount to encourage savers to deposit enough to really see significant growth via interest earned. You may also come across a term deposit provider that has a maximum balance allowed for each deposit account.

Term deposit balance limits vary across each financial institution and can be as little as $100 or even unlimited. But generally speaking, a provider’s term deposit balance limits will range from $1,000 to $2 million.

Term deposit interest rates are typically tiered based on account balance. For example, you may find one set of rates for term deposits with balances of $1,000 - $4,999, one set of rates for term deposits from $5,000 - $49,999, and another set for balances over $50,000.

It’s worth keeping in mind that providers often reserve their higher interest rates for savers depositing a greater amount of money, as not only will the saver gain a greater return, but frankly, the provider gets more money on their books.

Many term deposit providers reserve their most competitive interest rates for savers with balances over $250,000. But there are also downsides to depositing over this amount into a term deposit.

The Australian government deposit guarantee protects Australians with funds deposited in authorised deposit-taking institutions (ADIs) on balances up to $250,000 in the event the ADI were to go under. However, if your balance were over $250,000, you may lose out on the remaining funds above this amount if the worst were to occur.

For this reason, some experts recommend opening multiple term deposit accounts if you have funds greater than $250,000 to deposit. But this also means you may end up being offered a lower interest rate and paying multiple ongoing costs, such as break fees.

Whatever your financial situation, if you're considering depositing funds greater than $250,000 into a term deposit, it's worth ensuring that you're confident the financial institution will not go under for the duration of the fixed term. 

Whether you have a big or small term deposit balance the same rules apply for how you should consider comparing your options. Here are a few things you may want to consider before applying for a term deposit:

It’s worth remembering that while you do fix your term deposit interest rate, they are variable rates in the sense that they are influenced by the Reserve Bank of Australia’s cash rate. Meaning, if the cash rate were to rise, term deposit providers would be encouraged to increase rates too, and vice versa. However, it will not change once your rate has been locked in. This may just impact your term deposit choices when it comes to choosing a new account or rolling over your existing account at maturity.

This is why it can be useful to take a look at the current interest rate environment.

• If the cash rate is tipped to increase, it may be worth considering holding off on a new term deposit until they do so, allowing you to lock in a more competitive rate.
  
  
• However, if a cash rate cut is looking likely, locking in a competitive rate now may help you to avoid market fluctuations.

Term deposits can often be a more competitive option compared to savings accounts because of this, as you are able to lock in a fixed interest rate for a set term that will not fluctuate. However, a savings account interest rate may rise or fall periodically, depending on the account provider and the cash rate.