When it comes to saving money, there are many different ways to do it. One option that could help give your savings a kicker is an interest-bearing term deposit. But what is a term deposit? How does it work in Australia? And are they worth it?
The purpose of a term deposit and some of the benefits
A term deposit is a type of savings account that pays a fixed interest rate for a set period, usually between one month and five years. The key features of a term deposit include:
- Knowing precisely what you will earn in interest over the life of the term deposit.
- Getting a higher interest rate than a that of a regular savings account allowing you to grow your money faster.
- Limited access to your money during the term of the deposit (in accordance with account terms and conditions), so you may be less likely to spend it.
- A government guarantee in Australia on term deposits up to a specific limit, so your money is safe no matter what happens to the economy (see more on this below).
For these reasons, term deposits can be a great way to save for future goals such as retirement, buying a house, or going on that dream holiday.
Explore Term Deposits with Suncorp Bank
How much money do I need to open a term deposit account?
The minimum deposit required will vary depending on the bank or credit union.
With Suncorp Bank, you can choose to invest a a minimum deposit of $5,000 to start seeing the benefits of an interest rate return. Generally, the more money that you put into a term deposit account, and the longer the term, the more interest you can earn on your money.
How safe is my money in a term deposit account?
In Australia, all deposits - including term deposits - are protected by the Australian Government's Financial Claims Scheme (FCS). The FCS protects deposits of up to $250,000 for each account holder at each Australian bank. So, if you have $250,000 or less in a term deposit with a bank or credit union that fails, you'll get your money back.
Only Authorised Deposit-taking Institutions (ADIs) can offer term deposits in Australia, providing even more security for your funds.
Getting access to your funds before 'maturity'
If you close your term deposit early, you may be charged a fee and lose interest. The fee and the amount of interest you'll lose will depend how long you have left until the expiry of the term deposit account.
With Suncorp Bank, you have to notify us if you wish to withdraw funds from your term deposit early. You won’t have access to your funds until after 31 days. If you are withdrawing funds due to financial hardship, then some flexibility may be provided.
Making the most of your hard-earned savings
A term deposit can be a robust way to save for the future. You can choose the amount of money you’d like to put in, the term, and a bank will give you a fixed interest rate for that period. That means you’ll know exactly how much money you’ll have when your term deposit matures.
If you want an easy and secure way to save for the future, a Suncorp Bank Term Deposit might be right for you.
Published 4 November 2022
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Deposit products issued by Suncorp Bank (Norfina Limited ABN 66 010 831 722 AFSL No 229882). Terms and fees apply. Read the relevant Product Information Document and Terms & Conditions before making any decisions about this product. Any advice does not take into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.
The information is intended to be of general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.
Fixed Term Deposits issued by Suncorp Bank (Norfina Limited ABN 66 010 831 722 AFSL No 229882). Advertised rates not available for alternative Interest Payment frequencies. An interest adjustment will apply to early withdrawals. Other Fees and charges may apply and are available on request or on our Product Information Documents and Forms page.
