Putting aside money for the future is smart, but with different options for saving it can be hard to know which is the right one for you.

The key to making this decision is fully understanding your different savings choices and getting to grips with some of the jargon that surrounds them.

This blog is going to look at the benefits of putting your savings into a term deposit by exploring what a term deposit is, and how it can help you reach your savings goals.

How does a term deposit work?

If you put your money into a term deposit, it is effectively locked away for a predetermined period (this is the ‘term’). In return, you’ll receive a guaranteed interest rate for the duration of the term, which means you know precisely what amount you will receive at the end of the term.

While the idea of a term deposit is based on the principle that you can’t access the money until the term has ended, you can usually withdraw it if you really need to, typically paying an interest reduction for doing so, and sometimes you’ll need to wait up to 31 days.

What makes a term deposit an effective savings strategy?


1. You can’t easily dip into it

While we may have the best of intentions when putting our money into traditional savings accounts, ultimately that money is still easily accessible. If you find it too tempting to dip into your savings, a term deposit might be a good strategy for you, as it means this temptation is reduced (given the interest reduction discussed above and the possibility of having to wait up to 31 days to receive your money if you want to break the term deposit prior to the end of the term). In turn, this may help you to be stricter with yourself when it comes to sticking to weekly or monthly budgets, as you only have a set amount of money available.

2. You know what your money will earn

Because your money is locked away at a fixed rate of interest, you can calculate exactly how much interest you’ll earn through the life of the term. Again, this is super helpful for budgeting, as it allows you to more accurately plan for the future and set yourself high but achievable savings goals.

Also, you’ll have greater savings certainty than when placing your money in a normal savings account, where your interest rate may change based on movement in the wider market rates. In this situation, if interest rates drop, so too does the rate your money earns.  A term deposit however has a fixed interest rate, which means that you’re protected against downturns in the market (for the duration of the term of the term deposit).

In other words, a term deposit is a low-risk way to grow your savings. As long as you’ve planned well and know that you won’t need access to the money during the term, you can set and forget your interest rate, letting your savings grow steadily in the background with guaranteed returns.

3. No account keeping fees

Another way in which your money works harder for you in a term deposit account is that there are no account keeping fees associated with this type of savings account at Qudos Bank.

You simply select your term length (our standard term lengths are 3, 6, 9, 12, 24 and 36 months) and your guaranteed interest rate, and then watch your savings start to accumulate. 

If you think that a term deposit, with its security and guaranteed returns, is the best way to achieve your savings goals, you can open one with Qudos Bank today. If you’re an existing Qudos customer, you can do this easily through your online banking. If you’re interested in more information, get in touch with the team today.


^ Interest can be payable monthly (standard terms only), or at maturity (terms <12 months, including special terms) or annually and at maturity (terms>12 months). Standard terms are available for 3, 6, 9, 12, 24 and 36 months. Special terms available for 5, 7 and 11 months.

You may withdraw or transfer the balance of your term deposit early by giving us 31 days notice. However if you do, we will reduce the interest on the term deposit from the date it was opened until the date of withdrawal or transfer by 2% per annum, or the term deposit rate if it is less than 2%. We have the discretion to delay the withdrawal or transfer until the end of the notice period (but not beyond the maturity date). If you have already been paid interest, the reduction will be deducted from the balance of the term deposit.

Before opening an account with us, you should read our Terms and Conditions for Savings Accounts and Payment Services, Supplementary Terms and Conditions for Term Deposits and Financial Services Guide.

As the information in this blog is of a general nature and has been prepared without considering your objectives, financial situation or needs, before acting on the information, consider its appropriateness to your circumstances.

Rates as at 13th April 2022


Published May 2022