One of the great things about a term deposit is that it’s not only a low risk way to earn a return on your savings, but also a pretty low maintenance one. That doesn’t mean there aren’t some great tricks to making your term deposit work harder for your money – but it does mean that opening a term deposit is a pretty stress-free process. Term deposits are great investment vehicles for savers of all ages and experience levels and they usually last from one month to five years. They’re low risk and very predictable as not requiring much work – they’re a real “set and forget” sort of investment. You might be able to bag a bonus interest rate if you reinvest your interest and principal amount at maturity, but other than watching your calendar for the renewal date, there’s not much to do. You just sit back and wait for your interest payments, which will be either at intervals or at maturity, depending on the term or your instructions to the bank. Sounds great, but not all term deposits are the same Apart from the different lengths, interest rates, withdrawal notice fees and occasional bonus offer rates, Australian banks have different minimum amounts for opening their term deposits. The Big Four banks – Westpac, the Commonwealth Bank, ANZ and NAB have a minimum opening deposit of $5,000. Other institutions have lower minimum opening balances. For example, UBank requires only $1,000 to open a term deposit and offers an interest rate of 2.05 per cent on 12 month terms. At the other end of the scale, Citi has a term deposit that you’ll need $250,000 to open. This is more for people who have recently inherited money or sold a property and who want to grow this amount for a period of time. How to open a term deposit Once you’ve compared accounts and chosen your ideal term deposit, you’ll need to click through to the provider and fill out an online form. It’s important to give the bank your everyday phone number and email address so they can get hold of you when the account is almost maturing. 100 points of ID You will need some photo ID – drivers’ licence, passport or similar – to get to 100 points of ID. The good news is that most banks let you take a photo of your license or passport and upload it. What is the minimum age for opening a term deposit? Most banks have a minimum age requirement of 12 for term deposits. Your deposit amount You may just have the bare minimum or you may have quite a bit to deposit, but you need to remember that once it’s in the account, it’s effectively locked in. Make sure you can spare that money for the entire term because if you have an emergency you don’t want to have to rely on it. Choosing your term You can usually choose between one month and five years, so if you’re opting for a one or two-month term deposit you don’t need to worry about future budgeting too much as you’ll soon have the cash back. However, longer terms usually attract better interest rates. Your future savings plan No matter how long your term is, it’ll end at some point so you need to know what you’re going to do with the money at that time. If you see a better term deposit deal with another provider then you might want to move your funds there once they’re freed up. Alternatively, you may use them for the purpose you saved them for. Then again, you might just want to roll them over into another term. Beware, though, that you might be on a lower interest rate the second time around, especially with the RBA making noises about further cuts. So be prepared to shop around again for the best term deposit rates. Tips for a successful term deposit Do your homework Look around for an account that really suits you then take your time to make a decision. Read about the different products on offer, their features, their pros and cons and then pick your best one. You don’t have to rush. Do the maths As your interest rate is fixed when you make the deposit, you know how much you’ll be getting at maturity. You can’t add more funds during the term, so you’re dealing with definite amounts, which makes using a term deposit calculator much easier. If you find that a particular term deposit won’t meet your target, then you can eliminate it from your search. How to apply for a term deposit Once you’ve got your existing bank details as well as your ID to hand, then applying’s pretty easy. Lots of providers have online application facilities, although you may prefer to apply over the phone or even go retro and head to the physical branch to open the account! Get to know your term deposits Whatever you decide to do, if you’re new to term deposits then it’s vital that you spend at least a little time getting to know how they function and how they’ll fit into your overall savings campaigns. Term deposits are slow, steady and predictable in nature, so they make a great vehicle for retirees, cautious first–timers as well as a good back–up for the more adventurous investor with a vibrant portfolio. The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.