Author: Gary Luck

Savings and Investment Accounts - term deposits vs high interest accounts

With many people looking to for the safe returns of putting their cash in the bank rather than in the stock market our Wollongong Branch Manager Gary Luck explains the difference between term deposits and high interest savings accounts to help you choose the investment that is right for you.

Australians are saving more than ever before. Many customers are saying to me that they have some cash to invest but given the volatility of the markets, they are looking for an alternative to shares and managed funds. Term Investments and high interest Savings Accounts are an alternative to shares and property. With the Greater’s rates as high as 6% p.a you can get relatively high returns without the risk.

Australian financial institutions are very safe, well run places to invest your money. Recently the Australian Government made the Government Deposit Guarantee, introduced during the global financial crisis, a permanent feature of the financial system. This means that all deposits of up to $250,000 in Australian banks, building societies and credit unions are guaranteed by the Australian Government. That’s some added peace of mind that your money is safe and secure.

One of the common questions I receive from those people wanting to invest in cash is “What is the difference between a term deposit and a high interest savings account?”

Term Deposit (Term Investment)

With a term deposit your money is locked away for a set period of time. You choose the timeframe you want to invest for (usually from one month to five years). The rates may be different rates for different time periods and, depending on the term you choose, interest is paid monthly, six monthly or at maturity.

 You can open a term deposit with as little as $1,000.

 If you access your funds you break the term and you receive a reduced interest rate.

 High Interest (Bonus Saver) Account

This account is like an everyday savings account but you must make at least one deposit and no withdrawals in a calendar month to receive bonus interest. If you don’t, you don’t earn interest for that month only, giving you a little more flexibility than a term deposit.

You also don’t need as much money to open this account as you do a term deposit – it can be as little as one dollar.

The Greater’s version of this account is called a Bonus Saver Account. It is a statement only account, which helps to avoid the temptation of accessing your savings. The other bonus with the Greater’s account is that interest is calculated daily and paid monthly so you are earning interest on your interest each and every month.

It is a good idea to arrange an automatic payment into the account from your pay or other accounts. Free internet and phone banking allows you to can help you keep track of how your savings are going.

The other little known benefit of a Greater Bonus Saver Account is that, in addition to high interest, you may also qualify for bonuses such as the waiver of the establishment fee on a personal loan and additional triangle reward points toward your FREE holiday if you take out a Greater Getaways Home Loan.



Term Deposit (Term Investment)

Bonus Saver

Minimum amount to open



Access to money

Locked away for the specified time period

At call BUT if you don’t make at least one deposit or you make a withdrawal in a calendar month then you do not receive interest 

Term of investment

Choose from 1 month to 5 years

Ongoing – as long as you keep the account open

Interest frequency

Calculated monthly, six monthly or at maturity, depending on term

Calculated daily and paid monthly

Free internet/ phone banking



Monthly account keeping fees



Available online




For a full list of features or to find out more about investing, visit the Greater’s website, call 1300 651 400 or pop in and talk to our friendly staff at one of our 68 branches. After all, we were voted Australia’s Best Savings Account provider and Australia’s Building Society of the Year in the 2011 Mozo People’s Choice Awards.