Top 12–month term deposit rates in November 2019

Term deposits are popular with retirees, sophisticated investors wanting to diversify with cash and savers needing to lock their cash away.

12-month (1-year) term deposits are one of the most popular terms for fixed interest cash deposit investments.

Usually, term deposits in Australia range from one month to five years, with many people opting for a one or two–year term. If you’re looking for a relatively short–term investment product then a 12–month term deposit may be useful to you.

Here’s five of the best 12–month term deposit rates for you to look at.

Judo Bank revised its term deposit rates last week.

On a 12-month term, Judo Bank offers savers 2.00 per cent p.a. on minimum deposits of $1,000 with interest paid annually and there’s also a 0.10 per cent bonus interest rate if you decide to roll your principal amount over for another year.

All Judo Bank’s term deposit rates were updated on Thursday 21 November 2019:

Judo Bank offers easy quick online sign-up and funds transfer. Like all banks, deposit with Judo are covered by the Australian government’s deposit guarantee scheme.

The UBank 12-month personal term deposit pays savers 1.60 per cent p.a. on deposits of between $1,000 and $2,000,000. The interest is paid annually, or there’s the option to receive interest monthly at a rate of 1.50 per cent. As with Judo Bank, there’s a 0.10 per cent bonus rate if you roll over your principal or total at the end of the term.

The AMP term deposit has an interest rate of 1.65 per cent p.a. on balances between $100,000 and $500,000. The interest is paid out annually or you can opt for six–monthly payments at 1.55 per cent, quarterly payments at 1.50 per cent or monthly payments at 1.40 per cent.

The Bank of Sydney term deposit is an online–only option that pays savers an interest rate of 1.65 per cent p.a. on deposits of between $1,000 and $999,999. The interest is paid annually and there are penalties for early withdrawal.

The Rabobank Online Savings term deposit is another online–only products and it pays 1.70 per cent p.a. on deposits between $1,000 and $2,000,000. There’s the option to receive interest payments six–monthly or quarterly at 1.69 per cent or monthly at 1.68 per cent. There are penalty fees for early withdrawal.

More about term deposit interest rates

Term deposits are all about saving and growing money so they offer higher interest rates than transaction accounts and these interest rates are fixed. The price for this, however, is that your money will be locked away for the duration; you won’t have easy access to it and many term deposits have penalty fees for early withdrawals.

The fixed interest rate also protects your money from dips in the cash rate, so you know how much you’ll get at maturity.

The advantages and disadvantages of term deposits

The advantages

You know how much your return will be (as long as you leave the money alone) and you’re shielded from drops in the cash rate because your interest rate is locked.

The interest rates are good. The provider essentially extends this rate to you in return for you leaving your money with them for a set period with no withdrawals.

There’s a term deposit for pretty much everyone. You don’t need a huge fortune to open one, as some term deposits have a minimum of $500.

The disadvantages

If the cash rate rises, your fixed interest rate doesn’t follow suit. It can be frustrating to watch and wait for the term to end.

Your money is harder to access than if it was in a transaction or savings account. You’ll usually need to give 31 days’ notice and you may have to pay a fee or have your interest rate reduced.

Some savings accounts have higher interest rates, but these rates may have conditions, like a minimum monthly deposit.

Comparing term deposits

Look at the interest rate

The interest rate is crucial when you’re choosing a term deposit. You need to look for the highest rate so that you get the best return. In some cases, however, the highest rates might involve an opening deposit that’s too high for you. You need to find a term deposit that you can afford to open and leave alone so that you make the most of your interest rate.

Look at how often the interest is compounded

Another important factor is the frequency with which your interest is compounded, as this affects your eventual return. If your interest is compounded monthly then you’ll earn more than you would if it’s compounded annually. Use a term deposit calculator to see what your balance at maturity will be.

Where your interest is paid into

When you open a term deposit, the institution might need you to open a linked account with it if you don’t already have one. This might not be convenient for you, so check to see if you can have the interest payments sent to an Australian account of your choosing.

The minimum balance requirement

Some term deposits have an opening balance of $1,000, a few even as low as $500 but this is rare.

Others have much higher requirements – $10,000 or even more. Make sure you won’t need to withdraw any of the money early if you deposit a higher opening balance, or you could lose some of your interest and have to pay a fee.

Compare term deposits from Australia’s banks and credit unions at InfoChoice.

The products compared in this article are chosen from a range of offers available to us and are not representative of all the products available in the market and influenced by a range of factors including interest rates, product costs and commercial and sponsorship arrangements

InfoChoice compares financial products from 145 banks, credit unions and other financial institutions in Australia. InfoChoice does not compare every product in the market. Some institutions may have a commercial partnership with InfoChoice. Rates are provided by partners and taken from financial institutions websites. We believe all information to be accurate on the date published. InfoChoice strives to update and keep information as accurate as possible.

The information contained on this web site is general in nature and does not take into account your personal situation. Do not interpret the listing order as an endorsement or recommendation from us.  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.

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