Term Deposits Vs Extra Bonus Saving Accounts

Mintee on 06/06/2025 - 11:16
Last edited 06/06/2025 - 11:18

Hey everyone,

Just wanted to throw this out there and see what others are thinking: Are term deposits even worth it anymore?

With all these 'incentive saver accounts' around, offering pretty decent interest as long as you increase your balance each month or meet some other conditions, it feels like term deposit rates are falling behind. And then you’ve got the option to jump between banks to grab those juicy introductory rates or special bonuses – sometimes significantly higher than a 6 or 12-month term deposit.

That said, it looks like the RBA are leaning towards cutting rates in the near future; hence these saving rates will also take a dip. So, part of me wonders whether now a good time might actually be to lock in a fixed rate with a term deposit, even if it’s not as high as some of those bonus savings account offers. Could be a good way to ride out the potential rate drops?

To be clear – I’m only talking about cash savings here. Not looking to compare with shares, ETFs, or other investments for the sake of this post. Just trying to figure out the smartest way to park cash in an account right now and earn something decent without taking on extra risk.

Keen to hear thoughts. Are you locking in? Chasing bonuses? Or just riding it out in a flexible account? Anyone seen and 'AMAZING' offers out right now?

Edit: I just want to ask about the potential income deferral with this method too . If interest is paid a maturity; and the length is long, does that mean you could potentially skip a entire FY?

Financial Bank Account Savings Account Term Deposit

Comments

  • joka on 06/06/2025 - 12:11
    +1

    I can see the benefits of the term deposits for people who may have come across some money but don't trust themselves not to spend it. This seems like a good incentive. But this is all theoretical. Don't know if people like that exist.

  • Shelca on 06/06/2025 - 12:14

    Not giving financial advice, but I prefer savings with bonuses etc as term deposits 'lock in' the money and you just never know when you'll need it. Breaking the term early usually involves penalties, including early withdrawal fees and a loss of interest. Bankwest have a good deal at the moment with 5.15% for 4 months.

    • silverstone2023 on 06/06/2025 - 12:22

      Bankwest have a good deal at the moment with 5.15% for 4 months.

      Interested. I cant find this rate on the BW website. Can you please provide a link?

    • Mintee on 06/06/2025 - 12:58

      My concern is 'Rates are variable and subject to change.Interest is calculated daily, credited monthly and applied to the relevant portion of your balance that falls within each tier.'

      So yes, youve gotten this rate for 4 months. But in that time, we may have had a 0.75% rate cut, im doubtful in that time they would be offering the same 5.15%. we would be at 4.4% (assuming its now lower or higher) - If I can find a term deposit rate at 4.75, now for 12 months, would I be better off?

  • pao2x on 06/06/2025 - 12:15

    The last few years ING savings maximiser has had better rates than term deposits

  • surfingedge on 06/06/2025 - 12:45
    +1

    The interest rate on term deposits is likely to be lower than normal savings accounts, even after taking into account likely RBA rate decreases and consequent decreases in the rate on the normal savings accounts.

    Basically you are paying (in the form of a lower rate) to have certainty with term deposits. But you may come out ahead if the RBA drops rates by more than the commercial banks predict.

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