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The term deposits with the highest rates are…?

The term deposits with the highest rates are…?

Term deposits aren’t necessarily paying very high interest rates these days, but, in some circumstances, they might be a good place to park your money.

Imagine you’ve got $5,000 to invest. Shares are one option. If you pick the right stocks, they might grow in value by 10 per cent or 20 per cent over the course of a year. But if you pick the wrong stocks, they might fall in value at a similar rate.

Term deposits are another option. The downside of term deposits is that you can’t touch your money and you’re guaranteed a relatively modest return.

But those are also positives. If you can’t touch your money – you can’t fritter it away. If your return is going to be small – well, at least you’re going to get a return.

Who’s offering the highest term deposit interest rates?

Let’s say you do, indeed, decide to invest your hypothetical $5,000 in a term deposit.

There are dozens of banks, credit unions and building societies to choose from, so which do you select?

To help you out, RateCity has conducted an analysis of the market for one-year term deposits, two-year term deposits and three-year deposits.

It turns out that the highest term deposit rates in Australia are being offered by smaller institutions.

One-year term deposits ($5,000)

LenderInterest rateFinal total
Arab Bank Australia2.85%$5,142.50
Teachers Mutual Bank2.80%$5,140
UniBank2.80%$5,140
Bank of Sydney2.76%$5,138
Australian Unity2.75%$5,137.50
G&C Mutual Bank2.75%$5,137.50
ME Bank2.75%$5,137.50
Bank Australia2.70%$5,135
CUA2.70%$5,135
People’s Choice Credit Union2.70%$5,135
RACQ Bank2.70%$5,135

Two-year term deposits ($5,000)

LenderInterest rateFinal total
G&C Mutual Bank3.00%$5,300
Teachers Mutual Bank2.90%$5,290
UniBank2.90%$5,290
Police Bank2.90%$5,290
Bank Australia2.80%$5,280
ME Bank2.80%$5,280
RACQ Bank2.80%$5,280
Regional Australia Bank2.80%$5,280

Three-year term deposits ($5,000)

LenderInterest rateFinal total
Australian Unity3.00%$5,450
RACQ Bank3.00%$5,450
Teachers Mutual Bank3.00%$5,450
UniBank3.00%$5,450
People’s Choice Credit Union2.90%$5,435
Police Bank2.90%$5,435
Bank Australia2.85%$5,427.50
ME Bank2.85%$5,427.50
Australian Military Bank2.80%$5,420
Bank First2.80%$5,420
G&C Mutual Bank2.80%$5,420
Horizon Credit Union2.80%$5,420
QBank2.80%$5,420

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This article was reviewed by Head of Content Leigh Stark before it was published as part of RateCity's Fact Check process.

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