Online savings more popular than term deposits

Long term deposits of five years are paying rates of up to 7 per cent, but if you need to access your funds before the term is up, you can be liable for large break fees. Bankwest has recently raised its five year term deposit by 0.75 per cent to 7 per cent to match RaboPlus. Commonwealth Bank is offering 6.5 per cent.

The break fee on a term deposit is determined by calculating the difference between the market rate and the term deposit rate. Infochoice CEO Shaun Cornelius says online savings accounts are significantly more popular than term deposits: “People do not want to lock their money away for long periods.”

Source: The Daily Telegraph