5 term deposits earning the highest returns right now

Everyone wants something different when it comes to interest rates.

Borrowers prefer their rates on the lower end, while savers are better off with higher interest rates.

And with the Reserve Bank of Australia cutting the official cash rate twice in one month for the first time ever, interest rates across lenders are some of the lowest the market has seen.

As COVID-19 triggers investor panic, many have turned away from the volatile share market and are looking to the banks to provide them with secure returns for their life savings.

Keeping in mind that Australia’s inflation rate is 1.8 per cent, here are five of the top term deposit accounts that generate the highest interest on the RateCity database (as of April 23, 2020).

The lowdown

1. Rabobank – 2.25% for 5-year terms
2. Judo Bank – 2.15% for 5-year terms
3. Greater Bank – 2.00% for 5-year terms
4. Westpac – 2.00% for 8-month terms (for those aged 65+)
5. Firstmac – 1.95% for 12-month terms

Rabobank

Rabobank currently tops the term deposit market with a 2.25 per cent fixed interest rate on their five-year product. This means you may only qualify for this rate if you lock away your money for five years. You will need a minimum of $1,000 to be eligible and you can choose to have your interest paid monthly, quarterly, half-yearly or yearly.

Savers may also receive an additional 0.10 per cent loyalty bonus when they automatically reinvest their term deposit before maturity. But if you change your mind and pull out of the term deposit before the term ends, you may be charged with early termination fees.

Judo Bank

The Melbourne-based neobank provides a personal term deposit with a rate of 2.15 per cent if you commit to a five-year term. If you can’t, or prefer not to put away your cash for that long, you could still earn 2.10 per cent on a four-year term, 2.05 per cent on a three-year term and 2.00 per cent on a two-year term. At least $1,000 is required to apply for a Judo Bank term deposit and interest can be paid at maturity, monthly or annually.

You might also receive an additional 0.10 per cent loyalty bonus when you reinvest your full initial deposit amount or more into a new Judo Bank term deposit immediately after maturity.

Greater Bank

Coming in third is Greater Bank’s five-year term deposit. The customer-owned bank has a higher minimum initial balance amount of $5,000 to access the maximum interest rate of 2.00 per cent. Savers will need to part with their money for five years before benefitting from interest, which is paid at maturity. However, with no monthly fees, you can be confident your hard-earned funds won’t be eaten away while being certain of how much your return will be on the other side.

Westpac Group banks (including Westpac, St.George Bank, BankSA and Bank of Melbourne)

If you’re 65 years or older, the special term deposit offered by banks in the Westpac Group might work for you. The big four bank has a 2 per cent interest rate for seniors who lock away their money for eight months, which is the shortest term on this list. 

The 2 per cent rate is available on deposits between $5,000 and $500,000. If you are an existing Westpac Group bank customer, interest can be paid monthly or at maturity. For new joiners, interest is paid monthly.

Firstmac

If you have at least $5,000 to invest and can commit to not touching your funds for 12 months, Firstmac offers a 1.95 per cent rate on its term deposits. With interest paid at maturity, you can watch your balance grow, knowing that your term deposit is still 15 basis points higher than the inflation rate.

Compare term deposits

Provider

Real Time Rating™Min depositInterest rateMaximum rate

$1,000

3.50%

for 3 months

4.95%

for 6 months

More details

Investment Plus

• Promoted
• 2024 Award Winner
• 3 months
• Automatic maturity rollover
• Joint application available
• Maturity alert by email

$5,000

1.25%

for 1 month

4.75%

for 8 months

Advance Notice Term Deposit

• 1 month
• Automatic maturity rollover
• Joint application available
• Maturity alert by phone

$5,000

0.10%

for 6 months

0.15%

for 12 months

Term Deposit

• 6 months
• Automatic maturity rollover
• Joint application available
• Maturity alert by phone

$5,000

4.75%

for 9 months

4.75%

for 9 months

Special Term Deposit

• 9 months
• Automatic maturity rollover
• Joint application available
• Maturity alert by email

$5,000

1.20%

for 1 month

4.45%

for 9 months

Term Deposit

• 1 month
• Automatic maturity rollover
• Joint application available
• Maturity alert by email

$5,000

1.25%

for 1 month

4.75%

for 8 months

Term Deposit

• 1 month
• Automatic maturity rollover
• Joint application available
• Maturity alert by email

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