Interest Rates and Payments on Term Deposits
Term deposits typically feature a fixed interest rate, as opposed to the variable rates of interest offered on high interest savings accounts which move up and down in response to official interest rate rises.
A fixed interest rate means that you get a fixed return on your investment, regardless of whatever happens with interest rates and the economy. This means that there is more certainty and security in a term deposit compared to a savings account, and less volatility than other investments in assets like property, commercial property or the stockmarket.
For terms shorter than one year, your interest will be paid at maturity of the term deposit. This means that for a 6 month term deposit, you will be paid your interest payment at a date 6 months after your deposit, as well having access to the original deposit amount at this date. This short term deposit is not advantageous if you rely on a regular monthly income stream.
For term deposit terms longer than one year, you will have an option of when you you would like to receive interest, from monthly options for interest payments to semi annually. The following options apply for payments of term deposits.
Short Term - Paid at Maturity
There are a range of term deposit options under one year in length which are referred to as 'short term' term deposit. For these short term deposits, the interest amount is paid at maturity. This means that your interest is paid at the end of the term deposit period. Short term deposits are terms such as:
- 1 Month (compare rates)
- 2 Months
- 3 Months
- 6 Months
- 9 Months
Long Term - Payment Options
Longer term deposits have the advantage of allowing you to choose when you can define the dates for the interest payments rather than waiting for the term deposit to mature. Long term deposits are terms such as:
- 2 Years
- 3 Years
- 4 Years
- 5 Years
- 7 Years
With a longer term deposit, you can choose interest payment frequencies such as:
Annually: your interest is paid at the end of 12 month period
Semi-annually: your interest is paid every six months
Quarterly: your interest is paid every three months
The payment frequency differs between term deposit providers so be sure to pick an interest payment time frame that suits your requirement for income.
Compare term deposits from the following providers...
On this website, WhistleOut only provides factual information about various term deposits which is supplied from various account providers and is in no way providing, or taken to be providing you with personal investment advice.
We recommend that you seek professional financial advice before acting upon or relying on any information provided on this web site, or provided by visiting any website which is linked to our website, by way of a link to the website. Should you decide to apply for a term deposit after visiting our website, you will be dealing with the provider of that savings account and not with WhistleOut.
WhistleOut may receive a receive a commission from some term deposit providers.