Term Deposits – Investment Strategy

Term deposits are a low-risk way to invest your money and earn a fixed rate of interest.

What are term deposits?

With a term deposit, you lock away an amount of money for an agreed length of time (the ‘term’) – that means you can’t access the money until the term is up. In return, you’ll get a guaranteed rate of interest for the term you select, so you’ll know exactly what the return on your money will be.

Term deposits can be used to earn a steady rate of income and diversify a portfolio.

Key Features

Benefits of term deposits

Term deposits are a low-risk way to invest your money and earn a fixed rate of interest.

They lock away your money for the time that you choose (the term), usually between one month and five years. You need a minimum amount to open a term deposit, for example, $5,000.

Downside of term deposits

There are some factors you need to be concerned about with term deposits, for instance, should you need to access your money sooner, you might need to pay a penalty fee and in many cases you’ll need to give up to 31 days notice. Therefore it’s important you’re sure you won’t need to access your money while you have it locked away in a term deposit. As your term deposit comes to an end, it’s also important to consider your options as some term deposits may automatically renew to the current rate at that time, which may be higher or lower.

Locking into a fixed interest rate can potentially have a downside – should interest rates go higher, you won’t be able to take advantage of a better rate while your money is locked in the term deposit.

How do I invest in a term deposit? 

Always shop around for the highest interest rate and best features before you select a term deposit. It’s important to check:

– Interest rate
– Time frame
Amount invested

Comparison websites can be a useful starting point, but – because they are generally businesses – they probably won’t cover all of your options and may make money through promoted links. 

If you need help choosing the right investments, get financial advice. A moneylab financial planner will help you set your financial goals, understand your risk tolerance and find the right investments for you. They are the experts in finding the best type of investment to suit you and your needs. If you have an investment idea or are looking to boost your wealth, contact us, and we’ll develop the most effective investment plan catered to you.


Investing without knowledge and understanding is just speculation and relies on luck. We recommend speaking to a professional about your financial goals and needs to ensure you make educated and composed decisions. Contact us today to speak to a financial advisor, who will help bolster your investment strategy and returns. 

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