Term deposits – time is right to invest

Now is the time to invest in term deposits as the banks and other deposit taking institutions are paying historically high rates of return. Westpac and St George are offering 6.8 per cent for a 12 month term deposit while the Commonwealth Bank is giving 7 per cent on a three year term.

Banks are offering these very high rates on deposits because they are trying to avoid the costs and difficulties involved in accessing funding in offshore wholesale debt markets. Banks are also prepared to wear some losses on deposits if it introduces them to new customers who they can then attempt to cross-sell more financial products to.

Source: The Australian