Top 10 things to consider when choosing a business term deposit
There are a few things to consider when deciding if a term deposit is right for your business.
There are a few things to consider when deciding if a term deposit is right for your business.
A term deposit is a type of savings account that locks away an amount of money for an agreed length of time, known as the ‘term’. Once money is put into a term deposit account, you can only access the money after the term is up. In return, you’ll get a fixed interest rate, so you know exactly what the return on your money will be.
Term deposits come in all shapes and sizes, with terms ranging from a few months to several years. With a Business Investment Account1 you can choose from 8 days to 5 years, depending on what works best for your business.
Most term deposits require notice and charge a fee for accessing your money before the agreed end of the term.
Others are more flexible, like the Flexi Business Investment Account,2 which allows you to access up to 20% of your savings without interest adjustment or administration fees. If you require more flexibility and access to funds sooner, a flexible term deposit or a notice deposit3 might be worth considering.
Typically, term deposits require a minimum investment of $5,000. You’re unable to add more money to the initial amount until the end of the term.
If you’ve got less than $5,000, or would like to regularly top-up your savings, you could consider a savings account or notice deposit to earn interest on your extra cash.
You’ll find interest rates and payment schedules online. View the Business Investment Account interest rates.4
Interest is often paid annually for long-term deposits and at the end of maturity for short-to-medium term deposits.
Your bank will usually contact you to explain your options when your term deposit is maturing.
If you do nothing, your term deposit may be closed, placed in the holding facility of your account, or be automatically reinvested for the same term at the interest rate available on the maturity date.
Information required may vary so check with the providers' websites
If you require access to funds before your term deposit maturity, you usually have to provide 31 days’ notice and prepayment costs may apply.
More money can’t be added to the initial amount until the term ends.
Explore our business term deposits
Explore our business term deposits to see how you can make the most of your business savings.
The target market for this product will be found within the product’s Target Market Determination.
This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information.
1 You can view the General Information and Terms and Conditions for Business Investment Accounts, our Financial Services Guide(PDF) and the Electronic Banking Terms and Conditions (PDF) and should consider them before making any decision about these products and services.
2 You can view the General Information and Terms and Conditions for Business Investment Accounts, our Financial Services Guide(PDF) and the Electronic Banking Terms and Conditions (PDF) and should consider them before making any decision about these products and services.
3 You can view the Capital Growth Account Terms and Conditions (PDF), our Financial Services Guide (PDF) and the Electronic Banking Terms and Conditions (PDF) and should consider them before making any decision about these products and services.
4 Interest rates on offer may vary at any time without notice.