What is term deposit rollover risk?

The Australian Securities and Investment Commission has identified rollover risk as the biggest risk for investors using term deposits to grow their savings.

In the absence of instructions from the saver, banks and credit unions rollover a term deposit at the end of the term, usually to another term deposit with the same length, often at a lower rate.

Smart savers need to keep aware of the date of their term deposit maturity and actively choose another, higher rate term deposit for their savings.

Source: infochoice.com.au

 

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