Quick guide to the different types of term deposits


Term deposits are a secure way to grow your cash with minimal risk. Recurring deposits is a great option for salaried individuals as it encourages systematical savings and assists in building financial discipline.

As a summary, a term deposit is a fixed-term investment that includes depositing money into an account at a specific financial institution. Term deposits investments generally utilises short-term maturities which can range from one month to a few years and will have varying levels of required minimum deposits.

Here are the different types of term deposits available for individuals:

Short term deposits

A term deposit lasting anywhere from 1 to 12 months and is good for people with short term savings goals or those who aren’t keen on locking their savings away for years at a time. Shorter-term deposits don’t offer big interest rates compared to long terms.

You should try opting for a short-term deposit using a rollover option. With this, you’ll have the chance to withdraw and deposit more funds after the original term runs out, and it also has the capability to extend and save for longer. Just ensure that the rollover rate is still competitive in your chosen institution.

Long term deposits

A term deposit usually lasts from 1 year up to 10 and is good for savers with long term goals, or those who have a lump sum from things like Christmas bonus or inheritance, which won’t be used in their regular budget. Long term deposits are fantastic for retirees who want a low-risk investment strategy.

In any case, you must plan long term since the money will be untouchable for years at a time, which can potentially make emergencies a big issue! Assess different options and find the most competitive rate before locking into a long-term deposit since you’ll be stuck with it a while.

Sample offer: Basic Term Deposit Rate – 2.50 % P.A.

The above rate is the most basic term deposit that’s available for deposits over $5,000 for 12 months with interest paid at maturity. With this account, you can enjoy great returns and the peace of mind knowing exactly what your investment is worth. It also offers a fixed rate of interest on the amount invested for the term you’ve chosen with no annual or monthly account keeping fees.

For Investments of $200,000 or above, your term deposit provides you with access to our dedicated Treasury Team of professionals and a guaranteed rate of return for investments from 21 days up to 5 years.

How do I get started?

You can kickstart the application process online thanks to the internet and websites that offer such services. Basically, you need to have the following requirements:

  • You are a permanent Australian Resident, and
  • You are 18 years or older

What you need to complete this application

  • Australian mobile number
  • Email address
  • Tax File Number (optional)
  • Consent for identity verification preference

Looking for a property loan with premium features and practical payment plans/rates? Newcastle Building Society provides the best term deposit rates whether you’re an individual looking for your first home, a family aspiring for a bigger address, or an investor looking for your next lucrative project.

As always, as a wise investor, you need to do ample research before committing to term deposits. For instance, when buying a term deposit, you can only withdraw their funds after the term ends. In some cases, the institution may allow the investor early termination, or withdrawal of funds, if you give several days notification, however, there will be a penalty assessed for early termination.

Best of luck!

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