Bank shares offer better yields than term deposits

An investment in a bank’s shares might be a better investment that saving through a term deposit offered by the same bank. The best 12-month term deposit rate from Commonwealth Bank is a paltry 2.2 per cent. In contrast, an investor in CBA shares received a dividend return that was more than double at 5.21 per cent. Similarly, NAB are offering 2.85 per cent for a $5,000 term deposit compared with a dividend yield on their shares of 5.76 per cent. However, term deposits provide a capital guarantee, while bank shares may lose value.