Some of the top-rated term deposits in March 2024

Could a term deposit help to safeguard part of your wealth from uncertainty? Selecting the best solutions to protect your assets and grow your investments isn’t always easy, but there are a range of options to consider. 

The official cash rate typically determines the interest rate you will receive on your savings account, among other things. This rate is therefore subject to change in line with how the cash rate moves. With the cash rate likely at its peak for this cycle at 4.35%, it means a higher interest rate, and therefore return on your savings. However, the cash rate can change at any time, if the Reserve Bank chooses to do so at their board meetings, which happen 8 times a year. This means that the interest rate on your savings account can change too.

Many economists from major banks are forecasting that the Reserve Bank of Australia (RBA) could start cutting the cash rate before the end of the year. Knowing what the RBA will do and when is never certain, which means the interest rate on your savings account is never certain either. For some savers, this is no problem - but for others, the security of a guaranteed interest rate, like what a term deposit offers, is a priority.    

While term deposits are often compared to savings accounts, they are very different financial products that fulfil very different needs for Australians. A savings account lets you earn interest on the money you deposit, and often offers bonus interest if you fulfil terms and conditions, such as making regular deposits and no withdrawals. But you’ll still have the option to withdraw or transfer money from a savings account at any time, even if you could end up missing out on some extra interest.

Term deposits are generally less flexible than savings accounts. Rather than making at-will deposits and withdrawals, you deposit your money at the start of the term, to be withdrawn when it reaches maturity, or rolled over into a new term. It is possible to withdraw money from a term deposit early, but you’ll often need to provide at least a month’s advance notice. There also aren’t special conditions for a higher term deposit interest rate, and because term deposit rates are fixed in advance, it’s often easy to calculate exactly how much interest you’ll earn ahead of time.

Because term deposits make it harder to spend your money, and are guaranteed by the government, some Australians use them to help protect part of their wealth. While the interest returns may not be as high as with some other investments, there’s also a much lower risk of loss or volatility. Consider contacting a financial adviser for help working out if a term deposit could play a role in your household budgeting and wealth management.

To help you more easily compare term deposit options, RateCity’s Real Time Ratings™ combine the interest and flexibility of each term deposit into a simple star rating. These ratings are updated regularly for accuracy, and ranked in different categories on RateCity’s Term Deposit Leaderboards. The top-ranked term deposits in different categories may also become eligible for a RateCity Gold Award.

(Rankings are correct at the time of publishing. Please note lenders may trade places on the list as interest rates and fees change and RateCity’s tracker reflects these movements.)

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