Home > Term Deposits > RAC Term Deposits

RAC Term Deposits

Name: RAC Term Deposits
Creator: Savvy
Published: 2022-09-14T16:47:16+09:30

Explore RAC's term deposit offers and interest rates to help you compare your options with Savvy.

Written by , updated on September 11th, 2023

The Royal Automobile Club of Western Australia (now just known as RAC) was founded by a group of motoring enthusiasts in 1905 as an independent voice for road users. It now offers roadside assistance, insurance, home security and a wide range of financial services, including term deposits, for retail clients.

Find out if RAC Finance term deposits are the best option for your savings here with Savvy. Check your eligibility and compare interest rates and terms available to help you find the best interest rates for your savings before making your investment.

*Please note that Savvy does not represent RAC for its term deposit products.

RAC term deposits explained

What term deposits does RAC offer?

The RAC only offers a limited range of term deposits, which range from six months up to four years.

RAC term deposit interest rates

Term length offered	Interest paid monthly	Interest paid quarterly	Interest paid half-yearly	Interest paid annually
6 months	N/A	N/A	2.45% p.a.	N/A
1 year	3.15% p.a.	3.20% p.a.	N/A	3.25% p.a.
2 years	3.90% p.a.	3.95% p.a.	N/A	4.00% p.a.
3 years	3.35% p.a.	3.40% p.a.	N/A	3.45% p.a.
4 years	3.35% p.a.	3.40% p.a.	N/A	3.45% p.a.

(Effective 14 September 2022)

Interest payment frequency

For long term deposits of a year or more, interest can be paid either monthly, quarterly or annually. For their six-month term, interest is only payable at half-yearly intervals (which is at maturity in this instance). Deposits are accepted from trusts and business term deposits are also available.

Minimum deposit amount

The minimum required for a term deposit is $5,000 and the maximum amount accepted is $1 million (amounts over this sum by special arrangement).

Investment risk

The RAC is not an authorised deposit-taking institution (ADI), which means that when you deposit funds with them, they aren’t protected by the Australian Government’s Financial Claims Scheme. This scheme applies to all ADIs in Australia and guarantees personal savings up to $250,000 per person per ADI, in the unlikely event that a financial institution collapses. You should consider this investment risk when deciding where to park your savings versus the competitive interest rates offered.

How do I open a RAC term deposit?

Term deposits can be opened online, by printing out an application form and either posting or emailing it or in person by visiting an RAC office. To open a term deposit online, you’ll have to be an existing RAC member with online access.

What are the requirements for opening an RAC term deposit?

The main requirements for opening a term deposit with RAC are as follows:

You do not have to be a prior member of the RAC to take out a term deposit, but opening a term deposit automatically gives you RAC membership, so you can enjoy member benefits
Must be aged over 18 years old
Must be either an Australian citizen or permanent resident of Australia

The pros and cons of RAC term deposits

PROS

High interest rates

The interest rates on offer are among some of the highest on offer in Australia, with very generous terms particularly for terms of a year and over.

Enjoy additional membership benefits

Opening a term deposit automatically gives you membership of the RAC, which provides a range of member benefits including retail discounts, movie tickets, reduced price fuel and cheap travel deals.

Support the WA emergency rescue helicopters

By depositing your funds with the RAC, you will be contributing to the sponsorship of the RAC Rescue Helicopters, which provide emergency medical rescue services for remote locations in WA.

CONS

No government guarantee

Because the RAC is not an authorised deposit-taking institution, your savings are not covered by the Australian Government’s Financial Claims Scheme, which guarantees deposits up to $250,000.

Must be a resident of WA

To become a RAC member, you must be a resident of Western Australia and have a valid WA residential address.

Restrictive term lengths

RAC Finance does not offer a wide range of terms for their deposits, so if you only wish to invest your money for several months, your sole option available is a six-month term.

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 is the maximum length of term deposit that I can take out?

Financial institutions in Australia offer term deposits up to a maximum of five years in length. Prior to 2007, ten-year term deposits were routinely offered to customers wanting to lock away their savings for an extended period. Following the Global Financial Crisis, these ten-year terms were withdrawn.

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.