Term deposits are not all the same

Most institutions will charge an interest “penalty” for early withdrawals of term deposits, meaning you can lose much of your interest, while some don't allow early withdrawals at all.

You can “lose” up to 60 per cent of the advertised interest rate if you withdraw early.

Some institutions will offer a loyalty bonus of about 10 basis points when you roll over your deposit with them. This bonus usually applies when rolling over the same funds for the same term.

Investors should also be prepared to negotiate a better deal when they want to roll over as most institutions are prepared to offer a deal – even on smaller deposits.

Sydney Morning Herald