Term deposit vs at-call account: What’s the difference?

Whether you’re saving for a home deposit, a holiday or something special, a National Seniors Term Deposit^# or Money Manager^# at-call bank account can help get you there. It’s important to know the difference between the two and how both can benefit different saving goals. Let’s look at some of the factors and features to consider when deciding what is right for you.

A term deposit is a type of savings account where you lock away a set amount of money for a fixed period of time (the ‘term’) and receive a guaranteed interest rate, allowing you to know exactly what the return on your money will be by the end. Once you’ve made the initial deposit, you won’t be able to add additional money to the balance until the agreed term has finished.

The minimum savings required to open a National Seniors Term Deposit, starts from $5,000 with the duration of the term anywhere between 1 month and 5 years.

A term deposit is a great low risk option to grow your savings, thanks to the security of the fixed rate that the National Seniors Term Deposit offers. While your savings won’t be exposed to interest rate drops, it also won’t benefit from any interest rate rises, under the fixed rate.

On the plus side, most term deposits, including the National Seniors Term Deposit, don’t include set-up or account fees and offer a higher interest rate compared to most everyday banking and savings accounts to compensate for your funds being inaccessible throughout the term.

Provided you don’t need to access the funds while locked away, a term deposit can be a beneficial way to avoid the temptation of spending. If you do need to dip into the savings before the term has matured, 31 days’ notice is required and less interest will be earned. Overall, the more money you put into your term deposit or the longer your term is, the higher the interest rate will be.

At-call accounts are more flexible than term deposits, allowing you to both save and access your money for everyday banking. Interest is paid on the money in the account, allowing you to grow your initial deposit while still giving you access to your savings when needed.

The National Seniors Money Manager is an at-call bank account that offers a variable interest rate. Being a variable rate, the amount of interest payable is prone to fluctuate over time. If the market rates go up or down, the amount of interest you earn goes with it.

The National Seniors Money Manager allows you to easily transfer money between your accounts. This means you have the flexibility to add to your account savings after your salary or pension payment has been deposited or whenever you have extra money. It can be easily accessed via Visa Debit Card, and internet and phone banking via the mobile app, at Australian and overseas ATMs, Bank@Post and Auswide branch locations.

Overall, an at-call account offers great flexibility and is an easy way to save for both short and long-term goals.

Both the National Seniors Term Deposit and Money Manager accounts offer different features and benefits. 

Some of the key things to consider are:

Your budget
Are you able to lock a lump sum away for a period of time without touching it? If the lump sum of money forms part of your everyday budget and needs to be easily accessible for unforeseen circumstances, then perhaps an at-call account might be a good option.

Savings goal
Maybe you already have a large sum saved that you have not touched? Then a term deposit might provide a better return on your funds. If your savings goal is to regularly add to your savings or create saving ‘buckets’ such as entertainment or household bills, then an at-call account might be suitable.

Saving and spending habit
You know yourself best. Are you likely to dip into savings or splurge on impulse buys? Then a term deposit will keep your money secure and allow it to grow. If you prefer to regularly contribute to your savings and love to watch it grow with each dollar you add, then an at-call account offers the ease of flexibility and accessibility.

The best part about going with a National Seniors account is that both the Term Deposit and Money Manager are protected by the Australian Government's deposit guarantee* up to $250,000. All you have to do, is choose which account is right for you.