RBA cash rate hikes a winner for term deposit holders

With interest rates the highest they've been since 2012, term deposits are back with a roar and proving to be one of the easiest and most secure ways for Aussies to get a decent return on their money.  Yet a large proportion of people (48%) have never heard of them, or if they have, ever considered getting one.

A recent Mozo survey* found that only 7% of people are currently a term deposit customer despite the fact that interest rates on term deposits can be almost 4 times higher than the average ongoing non-conditional rate of a savings account, which is currently sitting at a miserly 1.30%^.

Peter Marshall, Mozo’s banking expert, says that the idea that term deposits are an outdated savings option is completely false. He points out that many term deposits are less restrictive than high interest savings accounts, are easy to set up and manage 100% online and can be fine-tuned to meet your savings goals.

“One of the biggest added benefits of a term deposit is that you are guaranteed a fixed rate of return,” he said. “Savings account rates are variable and while this can work in your favour, there are often a lot of hoops to jump through if you want to get the maximum rate and this isn’t always easy. ” 

So if you are considering where to park your cash, it might be a good time to reconsider taking out a term deposit. Here are the Mozo money editor’s top picks for this month.

Top term deposits

Judo Bank Term Deposit
  • 5.00% p.a. for a 1 year term, plus 0.10% loyalty bonus on roll-overs
  • 4.85% p.a. for a 2 year term
  • Mozo Experts Choice Best Term Deposit Winner 2023^

Judo Bank offers some of the highest term deposit rates in the Mozo database, across a range of term options between three months and five years. The minimum deposit is just $1,000 and interest can be paid out annually, at maturity or monthly (with a slightly lower interest rate). Judo Bank also lets savers have their interest paid to another bank and offers a 0.10% interest rate bonus on rollovers once your deposit reaches maturity.

Top savings accounts

Macquarie Savings Account
  • 5.50% p.a. for the first 4 months (4.50% p.a. ongoing)
  • Zero account keeping fees
  • Multiple Mozo Experts Choice Award Winner^

The award-winning Macquarie Savings Account offers a cracking intro rate of 5.50% p.a. for the first four months on balances up to $250K. The ongoing rate is a competitive 4.50% p.a. and there are zero account keeping fees. You'll need to open a Macquarie Transaction Account as a first step, but once that's done you can open as many linked Savings Accounts as you like using the Macquarie mobile banking app - one for each savings goal!

Bendigo Reward Saver
  • Earn up to 5.25% p.a. on balances up to $100K
  • No account keeping fee
  • Only requires $1 to open

If you’re looking for a straightforward savings account where you can earn high interest without having to jump through hoops, the Bendigo Reward Saver is worth considering. You only need a $1 to open the account and you will need a linked Bendigo transaction account but as long as you grow your balance each month (excluding interest deposits) you’ll earn up to 5.25% p.a. on balances up to $100K. There’s no account keeping fee and interest is paid monthly. If you don’t increase your balance in a month, the interest rate will revert to 0.30% so it’s a good idea to set up an auto payment into your account so that you’re guaranteed to get the higher interest. The account is 100% online so you’ll access and manage your account via e-banking or the Bendigo Bank app.

IMB Bank Reward Saver Account
  • 5.25% p.a. maximum interest rate for first 4 months
  • No monthly fees

IMB’s Reward Saver account is an accessible, simple, no frills savings account that is designed to help you save. You can grab up to 5.25% p.a. for the first four months from opening the account, after which as long as you make a monthly deposit of $50 or more and no withdrawals you’ll get an ongoing rate of 3.25% (T&Cs apply). What’s more, there are also no account keeping fees and the ability to access real time payments through Osko. Transaction fees may apply.

Compare other savings options available

Head to Mozo’s compare high interest savings accounts page, to see what other interest rates are out there.

*mozo survey: Mozo commissioned a nationally representative survey of 1012 Australians conducted by Researchify in February 2023 

^ Source: Mozo database 
Average ongoing unconditional savings rate of 1.30% compared to Judo Bank 5.10% p.a. 1 year term deposit rate. 23/08/23

* Different interest rates apply to different amounts or different interest payment frequencies.

^See information about the Mozo Experts Choice Term Deposit Awards

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