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Author: Lorien Jackson

Savings Account or Term Investment – which is right for you?

The two most commonly used options when it comes to Saving are High Interest Savings Accounts and Term Investments

Let’s examine them a little more closely so your decision can be made easier:

High Interest Savings Accounts

  • Low risk, convenient investment option
  • Differ from everyday accounts designed to do your banking, saving accounts are geared towards a long term goal
  • Usually don’t allow transactional access – not able to be linked to a card. Helps you to avoid temptation of dipping into your savings
  • Some accounts feature rule sets designed to help you save, such as only paying the higher interest rate if you make a certain deposit amount per month without any withdrawals.
  • Can be linked to everyday accounts, so if needed, you can tap into your savings for emergencies.
  • Perfect for people who are competent savers but want account flexibility

Term Investments

  • Low risk, convenient investment option
  • Suited more to those who will be tempted to tap into their savings, as money is locked away for a fixed length of time in order for interest to be paid.
  • Do not allow any transactional access, nor any withdrawal access to linked account during the length of the agreed term
  • Often have minimum opening balance requirements ($1,000 - $5,000) and can last anywhere from 30 days to 5 years
  • Due to fixed rate and term you know exactly how much you’ll end up with once the term has lapsed

There are literally hundreds of High Interest Savings Accounts and Term Investment options on the market to choose from, so comparing products based on interest rate and terms and conditions is always wise.

You'll be made all sorts of promises of amazingly high interest rates in order to get you and your money through the door. Make sure you closely examine just what it is you'll be getting from your account before you open one. If a rate seems high, it may in fact only apply for an introductory period of a few months, after which time you'll return to a less than impressive rate. Buyer beware.

At The Greater, we believe in straightforward, fair-go banking. We offer a number of high-interest Savings Accounts, with our Life Saver the perfect option for those under 25 looking to get ahead, as well as our flexible, easy to use Bonus Saver.

And when it comes to Term Investments, The Greater is able to offer competitive interest rates and terms to suit your needs.

Which do you prefer to use? High Interest Savings Accounts or Term Investments, and why? Let us know in the comments below.

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