Credit unions offering the best term deposit rates

24/05/2011

About 80 per cent of the $600 billion in term deposits is with the major banks. Yet, their term deposits pay between 0.5 percentage points and 0.7 percentage points less than the best rates in the market.

Those wanting to secure good interest rates may have to act soon as term-deposit interest rates have come down slightly over the past couple of months. A spokesman for InfoChoice, Dirk Hofman, says the top rates for one-year to five-year term deposits have all dropped this year.

Some of the highest-paying term-deposit rates are offered by credit unions and building societies. Yet the share of the term-deposit market held by credit unions and building societies is only about 5 per cent.

Credit unions and building societies are regulated to the same standards as the banks and are also covered by the government's retail deposit guarantee for cash deposits of up to $1 million per institution.

Source: The Age