term deposit guide

There are literally hundreds of organisations offering term deposits. There are several ways to find the best term deposit rate in exchange for locking your hard earned money away.

Why the great term deposit rates right now?

Major banks are unable to fund their requirements from their existing deposits base alone. Due to the increased risk considerations following the GFC, banks struggle to secure funding from foreign sources without paying a considerable premium meaning banks pulling out all stops to secure deposit funds locally.  

Just look at the term deposit rates on offer for retail deposits at the moment - competition for term  deposits is furious.

The fallout from the GFC will eventually pass and then bank's wholesale funding costs will return to more normal levels. At this point banks will have access to other source of funds and the competition for term deposits will abate.

That said, the enticing term deposit rates on offer right now may not be the correct path for you. Be sure to consider how you will feel if  the economy rebounds and you are have limited your access to funds that could have made a gain from a less risk adverse strategy such as shares or property.