Financial Planning

Our top tips when choosing a term deposit:

• Create a Budget – if you’re locking away a portion of your money in a term deposit, you should have the strategy in place to ensure you can fund your daily living costs. Break costs will likely apply if you withdraw your term deposit before maturity.
• Hold emergency funds in a separate account – A separate savings account with enough funds to meet any emergency expenses will help minimise the chance of needing to break the TD early.
• Choose the appropriate term – In most cases, a longer term will result in a higher interest rate offer.  Breaking a term deposit means you will not receive any benefits so pick a term suited to your circumstances. Sometimes it may pay to have 2 term deposits – one shorter and one longer term.
• Maximise your return – the more money contributed initially generally means more interest on return.
• Stagger the maturity dates – if you have multiple term deposits, you may want to consider staggering the maturity of your funds.  This will assist with regular availability of cash instead of being tied up in one long-term deposit.
• Find the best available rate being offered – Choose the best available rate to take advantage of the current market and produce the best possible income.
• Risk: While term deposits are often considered risk free, in reality they are not. Term deposits at building societies often carry greater risk than term deposits at banks.  Rate is important but so is fund stability.
• Government Guarantee: The government will guarantee monies up to $250,000 per person per institution on deposits guaranteed under the Financial Claims Scheme.