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.

What is the minimum age to open a short term deposit?

Many financial institutions have a minimum age limit of 18 years to open a term deposit, but other term deposits are open to children as young as 13 to open one. Check the individual conditions of whichever institution you choose if you are in the market to open a term deposit for a young person.

What different types of short term deposits are there?

Term deposits are available for all adults, pensioners and couples. There are even term deposits available especially for businesses and self-managed super funds, which offer different interest rates from personal investments. Term deposits are available in a wide variety of terms up to five years, although short term deposits under 12 months are the most popular. Longer term deposits may be more suitable for long-term investors rather than those just looking for the highest interest rate for their short-term savings, as well as in an environment where rates are falling.

How often will I receive the interest on my short term deposit?

You’ll be able to choose the frequency of when you receive your interest, either monthly, quarterly or at the end of your agreed term, although many institutions will only offer interest to be paid at maturity. You’ll typically receive a slightly higher interest rate if you choose to receive it less often, which is done to compensate for a lack of compounding, so it’ll likely work out to be roughly the same return.

What are the advantages of a short term deposit over a savings account?

The advantages of a term deposit over a savings account are that you’ll earn a higher rate of interest on your savings, and your nest-egg will remain locked away safe, without any temptation to raid your savings when the sales are on. You’ll also be protected from interest rate falls and be able to budget accurately into the future with a fixed interest rate on your savings.

What happens at the end of a short term deposit?

At the end of your term, you can decide whether to roll over your funds into another term deposit or transfer them to another transaction or savings account so you can access them. If you do transfer them to a transaction account, you’ll be able to access your money via. your linked debit card . Whatever you decide to do, once your agreed term is up, you’ll have to take some sort of action: you can’t just leave your savings in place once your term is over.