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Term Deposits vs Savings Accounts

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  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.

 (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.

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.


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 online/ phone banking



Monthly account keeping fees



Available online






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