If you’re looking for a low-risk investment, then you may want to consider putting your money into a Term Deposit. A Term Deposit could help you achieve your savings goals. In exchange for locking your money away with a bank for a set period of time, you could obtain a competitive fixed interest rate.
If you’re considering placing your money into a Term Deposit, then it’s important to weigh up your options, so you can make an informed decision.
What is a Term Deposit?
A Term Deposit is a form of investment where you deposit money into a financial institution for a set period of time. In return you earn a fixed interest rate, and your interest is calculated and paid based on the balance of your account.
The deposit terms are usually set between three months to three years, though you can discuss other options with your financial . Term Deposits typically carry less risks than investing in things like the stock market/cryptocurrencies.
The accrued interest from a Term Deposit could help you save for big purchase like a car or house.
You will typically see higher interest rates offered on Term Deposits than on savings and transaction accounts, which could make it an appealing option for people looking to accelerate their savings. The accrued interest from a Term Deposit could be helpful if you’re saving up for a big purchase, like a car or a house. Knowing exactly what rate you’ll be getting for the duration of your investment can provide a strong sense of comfort. To learn more about how much interest you could earn, we encourage you to use our Term Deposit calculator.
You can also learn more about how Term Deposits work by watching the video below:
What are the pros of investing in Term Deposits?
Fixed returns
A Term Deposit lets you know exactly how much you’re going to make on your investment thanks to a fixed interest rate. Rather than the uncertainty of whether your investment is going to be a success or failure, placing your money in a Term Deposit means that you’ll earn the amount of interest that corresponds with the length of time and the interest rate.
Safety and security
If you’re someone that worries about your money, then a Term Deposit could help you sleep a bit easier. High-risk investments aren’t for everyone, and a Term Deposit is a way of having your money work for you while also keeping it safe and secure. And as a Qudos Bank customer, your money in our deposit accounts (up to $250,000 per account holder) is protected by the
A Term Deposit makes your money work for you while keeping it safe.
Suitable for short-term goals
Planning to buy a car in 12 months? Earn extra money to put towards the purchase by placing your money in a Term Deposit for the next 12 months. Saving for a house? Increase your deposit by placing what you’ve saved to date in a Term Deposit. A Term Deposit could help you achieve your short-term goals, as you can choose a set time period which works for you. This makes it a sensible investment opportunity for those with specific milestones in mind.
What are the cons of investing in Term Deposits?
Lower returns than high-risk investments
Of course, part of the reason that high-risk investments are attractive to many people is because they can lead to high returns. While a Term Deposit offers security, the return may not be as high as other higher risk investments, dependant on the size and length of your investment. This is why it’s worth researching different financial institutions and their respective interest rates so you can get the most from your investment. A Term Deposit calculator could also help you better understand the options available to you.
Inflation risk
Term Deposits don’t always keep up with inflation. If inflation is high, then you’re not going to reap the benefits if Term Deposit interest rates go up during your Term Deposit period. This is especially important to keep in mind if you’re locking your money away for over 12 months.
Your funds are locked away for a fixed term
Life can change in a flash. If all your funds are locked away in a Term Deposit, and you need to access cash before the term ends, you will likely not receive the full benefit of the interest earned, and could incur additional costs or having to pay back previously accumulated interest to the financial institution.
What are the benefits of having a Qudos Bank Term Deposit?
Deposits of up to $250,000 per account holder are guaranteed
Qudos Bank is regulated under the Banking Act 1959 by the Australian Prudential Regulation Authority (APRA), just like the major banks. We are also registered as an Authorised Deposit-taking Institution (ADI). Because of this, our deposit accounts are covered by the Financial Claims Scheme, and Australian regulation provides a Government guarantee of up to $250,000 for each account holder – so you can be sure that money is protected.
Access a competitive interest rate with a Qudos Bank Term Deposit
Be part of an award-winning bank
In 2023, we won the Mozo Experts Choice Award for our Term Deposits^ for
Are you looking to put your money into a Term Deposit? Consider a Qudos Bank Term Deposit. Call us on 1300 747 747 and start your savings journey today!
Eligibility criteria, terms and conditions, fees and charges apply. As the information in this blog is of a general nature and has been prepared without considering your objectives, financial situation or needs, before acting on the information, consider its appropriateness to your circumstances.
^ Interest can be payable monthly (standard terms only), or at maturity (terms <12 months, including special terms) or annually and at maturity (terms>12 months). Standard terms are available for 3, 6, 9, 12, 24 and 36 months. Special terms available for 5, 7 and 11 months.
You may withdraw or transfer the balance of your term deposit early by giving us 31 days notice. However if you do, we will reduce the interest on the term deposit from the date it was opened until the date of withdrawal or transfer by 2% per annum, or the term deposit rate if it is less than 2%. We have the discretion to delay the withdrawal or transfer until the end of the notice period (but not beyond the maturity date). If you have already been paid interest, the reduction will be deducted from the balance of the term deposit.
Before opening an account with us, you should read our Terms and Conditions for Savings Accounts and Payment Services, Supplementary Terms and Conditions for Term Deposits and Financial Services Guide.
The Target Market Determination for our Term Deposit can be found at https://www.qudosbank.com.au/support/legal/target-market-determinations/
Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305.
Published November 2023
