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Bank First Term Deposits

Name: Bank First Term Deposits
Creator: Savvy
Published: 2022-09-09T16:50:01+09:30

Explore Bank First term deposit offers and interest rates to help you compare your options with Savvy.

Written by , updated on September 11th, 2023

Bank First was previously known as the Victoria Teachers Mutual Bank but changed its name in December 2017. It is a mutual bank offering a range of retail banking services to teachers and education professionals who live in Victoria. It now has over 110,000 customers and more than $2.69 billion in assets.

Explore your eligibility to invest with Bank First and find out what term deposits they have to offer right here with Savvy. You can compare interest rates and terms from other institutions around Australia with us today to help you decide if Bank First is the right place to park your savings.

*Please note that Savvy does not represent Bank First for their term deposit products.

Bank First term deposits explained

What term deposits does Bank First offer?

Bank First offers a range of term deposits from one month up to five years. They also offer Interest First, school and pre-school term deposits, but do not cater for business term deposits or investments.

Bank First: common term deposit rates

Term length offered by Bank First	Interest Rates
30 days	0.15% p.a.
90 days	2.00% p.a.
180 days	2.50% p.a.
270 days	2.75% p.a.
1 year	3.00% p.a.
2 years	3.00% p.a.
3 years	3.25% p.a.
5 years	3.75% p.a.
Interest First (5 months)	2.00% p.a.

(Effective 9 September 2022)

Interest First term deposits

Bank First offers a rather unique form of term deposit called an Interest First Term Deposit. It involves being paid the interest earned on your deposit in advance. You’ll receive the interest owed on the first day you deposit your funds, rather than at the end of the term. If you subsequently withdraw your funds early, the interest you no longer qualify for is taken out before your lump sum is returned to you.

However, the following conditions apply:

It is only available for a five-month term
Minimum deposit of $500 applies with no specified maximum deposit
The interest has to be paid into a Bank First transaction account, so you will need to have a transaction account prior to opening your term deposit
An Interest First term deposit can only be opened over the phone, in person in a branch, or through an online application form (you can’t open such a deposit through normal internet banking)

Other term deposits on offer

Bank First also offers term deposits for schools and pre-schools, for terms ranging from one to six months, with a minimum deposit of $5,000. Early withdrawals are permitted from these school term deposits, and interest is paid at the maturity of the term.

Early withdrawal penalties

Up to 20% of term remaining: 20% interest reduction
20% to 40% of term remaining: 40% interest reduction
40% to 60% of term remaining: 60% interest reduction
60% to 80% of term remaining: 80% interest reduction
80% to 99% of term remaining: 90% interest reduction

If you opt for a deposit term of more than two years, only seven days’ notice is required if you wish to withdraw funds, rather than the 31 days’ notice required for term deposits under two years.

How do I open a Bank First term deposit?

Existing Bank First customers can open a range of term deposits using their usual internet banking login details.

Customers who are new to Bank First will need to set up a standard transaction or savings account with the bank first before opening a term deposit.

What are the requirements for opening a Bank First term deposit?

The requirements for opening a term deposit account with Bank First are as follows:

Must be a Bank First customer before taking out a term deposit
Must be 18 years of age
Must be an Australian citizen or permanent resident
Must have an Australian residential address

The pros and cons of Bank First term deposits

PROS

Minimum deposit of only $500

Unlike many other banks which have a minimum term deposit of $1,000 up to $5,000, Bank First allows a term deposit of just $500 to be opened.

Competitive interest rates

The interest rates offered by Bank First are very reasonable compared to other small banks and online financial institutions, helping you get the best return on your savings.

Interest paid in advance

Bank First offers a very unusual term deposit feature which involves being paid the interest on your term deposit in advance of earning that interest.

CONS

31 days’ notice required to withdraw funds

Like with many other banks, you’ll be required to provide 31 days’ notice if you wish to withdraw your funds before the agreed end of the deposit period for deposits under two years.

Funds can’t be paid to another institution

Bank First requires you to fund your term deposit and receive your interest into another Bank First account, as funds can’t be paid to another financial institution.

Interest First only available for five months

The Interest First term deposits on offer are only available for a five-month period, so you won’t be able to select a term any longer than this if you wish to access your interest upfront.

More of your frequently asked questions about term deposits

What is a term deposit?

Although many people are familiar with the phrase ‘term deposit,’ not everyone knows what a term deposit is. A term deposit is an agreement between you and your bank or financial institution to lock away a set amount of money for a set period (known as the ‘term’ of the deposit) in return for a fixed rate of interest. As the interest rate and length of the deposit are fixed, you’ll be able to calculate in advance how much money your savings will earn during the life of the term deposit. When your chosen term is over, you can choose to either withdraw your funds and the interest earned or roll them over into another term deposit.

What are the advantages of a term deposit?

The advantages of a term deposit are that you’ll have certainty. You’ll be certain exactly how much interest your savings will earn over a pre-defined period, as the interest rate paid on a term deposit is fixed for the duration of the term. As your savings are locked away for that term, the temptation to dip into your savings is taken away. You can be certain that your savings will be intact at the end of your term, and know exactly how much interest they have earned.

Do all financial institutions offer term deposits for SMSFs?

No – not all banks and financial institutions offer term deposits for self-managed super funds. Those that do tend to be the larger banks or institutions which have a business focus. For this reason, it’s important to look around and compare SMSF term deposits with Savvy before making your final investment decision.

How can I work out how much interest I’ll earn on my term deposit?

You can use Savvy’s term deposit calculator to help you work out exactly how much interest your savings will earn over a set period. Just enter in the amount you wish to deposit, the term of the deposit and the interest rate offered, and the calculator will show you how much interest your savings will earn.