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Term Deposits

by Wealth Know How in Glossary

Unlike a bank account which allows you to deposit and withdraw money at almost any time, a term deposit is a deposit made with a bank for a specified term. The money in a term deposit will be locked up for that term.  The bank agrees to pay you a specified interest rate – which will not change – for the term, and to repay the full amount at the end of the term. You can choose a term, from one week to five years, and whether interest is paid on a regular basis or at the end of the term (when you get your original deposit back.) You can ‘break’ the term deposit before the end of its term, but there may be a penalty cost if you do.  In the hierarchy of investment products, term deposits are considered very safe and can also be eligible for the government guarantee on bank deposits, which was introduced in 2010. 

Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.

Published on 11 Aug 14

  • Unlike a bank account which allows you to deposit and withdraw money at almost any time, a term deposit is a deposit made with a bank for a specified term. The money in a term deposit will be locked up for that term.  The bank agrees to pay you a specified interest rate – which will not change – for the term, and to repay the full amount at the end of the term. You can choose a term, from one week to five years, and whether interest is paid on a regular basis or at the end of the term (when you get your original deposit back.) You can ‘break’ the term deposit before the end of its term, but there may be a penalty cost if you do.  In the hierarchy of investment products, term deposits are considered very safe and can also be eligible for the government guarantee on bank deposits, which was introduced in 2010. 

    Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.

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