A term deposit is a low-risk investment product that allows you to lock away your money for a pre-determined period at a fixed rate of interest. This can be anywhere from one month to five years. Essentially, you’re guaranteed a certain return while protecting your investment from volatile market shifts.

However, there is a catch - you’re unable to access the money until the term is up. Hence the phrase ‘lock away.’

When your term deposit reaches maturity, you typically have a few choices at hand: you can withdraw your cash plus interest earned, rollover your funds into another term deposit, or withdraw some and invest the rest.

If you have some cashola that you know you won’t need for a while, a term deposit (also known as a TD) could be a good way to put that money to work. But how do you even apply for one in the first place?

Read More: What is a term deposit and how do they work?

1. Prepare a budget

A term deposit can be a long term commitment, especially if you’re locking away your pennies for over a year. That’s why it pays off to have a budget - along with your future plans - in mind before you decide on a product.

Think twice about locking away ALL of your funds - you need enough available to access in case of an emergency. The last thing you want is to be making an early withdrawal (which will likely incur fees) because you didn’t have a spare $2,000 to fix your damaged car.

If you’re actively looking to purchase a big ticket item such as a car or boat in the near future, then a term deposit may not be the right course of action. You could consider a high-interest savings account instead.

Only open a term deposit if you are certain you won’t need that money for the chosen term.

2. Compare your options and choose your product

Before you open a term deposit, it's important to consider your options and compare the different products available to you. Research the interest rates on offer, account types, term lengths, fees, and the potential features e.g. automatic rollover, grace periods (some may be seven days while others are 14).

Most lenders let you apply for a term deposit account online, over the phone, or in person at a branch.

3. Prove your identity

Often, you’ll need to provide some form of ID when opening a TD such as: your personal details (name, address, phone number), driver’s license, Medicare card, and passport.

You will also be required to provide your Tax File Number (TFN) because interest income is treated as taxable income. If you don’t provide your TFN, any interest income will be taxed at the highest marginal rate (45%) and you won’t get your maximum interest earnings until the end of the financial year.

Typically, you can provide your TFN when initially applying for a TD or via the bank’s online portal or app later down the line.

Age limits on term deposits vary between lenders - some are available to savers as young as 14.

4. Supply your member number and nominate a savings account

If you already have an account with the chosen lender, you can supply your existing account or member number. If not, you will need to sign up.

You may find some lenders require you to hold an existing transaction account with them before opening a TD.

From there, you’ll need to nominate an account for the interest from your term deposit to be paid into every set period e.g. monthly, quarterly, twice a year, annually, or at maturity. Usually this is with the same bank as the term deposit or could be a separate account.

5. Have a minimum deposit ready

Once you nominate the term you want to invest for and the corresponding interest rate, the time will come to lock away your money. Many term deposits require a minimum investment - often around $500 to $1,000, but can be in excess of $100,000 for certain term deposit products. Major banks often have $5,000 as a minimum investment.

On the flipside of that is a maximum deposit. Most term deposit accounts have very generous deposit limits, sometimes $1 million or more. However if you have more than this, you may wish to spread the cash around different accounts.

You may also wish to spread large chunks of cash around different banks, because the government guarantees up to $250,000 per account holder per bank. If you have say $500,000 and in the highly unlikely event the bank collapsed, you could lose $250,000.

6. Transfer the funds

But how do I transfer my funds into the TD account?

There are four options:

  1. Online banking app

  2. Telephone

  3. In a branch

  4. BPAY

Most lenders recommend transferring money through the online banking app using the term deposits’ BSB and account number, as this is often the fastest and most convenient method. The New Payments Platform and Osko has quickened the pace of transfers, and most banks now participate.

From there, sit back and watch your funds earn interest!


At Maturity, Monthly$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]2500031$product[$field["value"]]$product[$field["value"]]More details

Term Deposit - 6 months

    At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]More details

    Term Deposit - 6 months

      At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details
      • No account keeping fees
      • Interest can be paid to other institution
      • Added loyalty bonus of 0.10%

      Personal Term Deposit - 6 months

      • No account keeping fees
      • Interest can be paid to other institution
      • Added loyalty bonus of 0.10%
      Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details

      Term Deposit ($1000-$500001) - 6 months

        At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]10008$product[$field["value"]]$product[$field["value"]]More details

        Online Term Deposit - 6 months

          At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]500031$product[$field["value"]]$product[$field["value"]]More details

          Online Term Deposit ($5000+) - 6 months

            Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details
            • Start with as little as $1,000
            • Receive a 0.10% loyalty bonus when you automatically reinvest your Term Deposit before maturity
            • You'll automatically get a High Interest Savings Account in your savings portfolio
            • Supporting Aussie farmers with every dollar you save

            Term Deposit ($1000+) - 6 months

            • Start with as little as $1,000
            • Receive a 0.10% loyalty bonus when you automatically reinvest your Term Deposit before maturity
            • You'll automatically get a High Interest Savings Account in your savings portfolio
            • Supporting Aussie farmers with every dollar you save
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            Rates correct as of May 20, 2024.View disclaimer