Why term deposits still matter
These accounts can provide a safe haven for senior savers in volatile times.
A recent report that the Australian dollar has been buying unusually large amounts of Japanese yen is a timely reminder that exchange rates can significantly affect the cost of an overseas holiday.
The Reserve Bank of Australia (RBA) recorded an indicative rate of about 114.5 yen to the Australian dollar at the end of August 2026, although the rate available to travellers will usually be lower after fees and provider margins are included.
An exchange rate is simply the value of one currency compared with another. When the Australian dollar strengthens against your destination’s currency, accommodation, meals, transport and shopping generally become cheaper in Australian-dollar terms.
When it weakens, the same purchases cost more. Even a relatively small movement can make a noticeable difference when applied to several thousand dollars of holiday spending.
If the rate for your destination appears particularly favourable, one option is to exchange some money before leaving. You could buy foreign banknotes for expenses such as taxis, tips, markets, or your first day’s purchases.
Alternatively, you may be able to load foreign currency onto a prepaid travel card, locking in the exchange rate for that amount. This can provide certainty and make budgeting easier because you know approximately how much foreign currency you have available.
Travel cards may also hold several currencies, which can be useful on a multi-country trip.
However, converting your entire holiday budget at once is not the only or necessarily the best approach.
Some travellers exchange money in stages, perhaps buying a portion now and leaving the remainder to convert closer to departure or while overseas. This reduces the risk of committing everything at one rate.
Others use a combination of foreign cash, a travel card, and a low-fee debit or credit card. Having more than one payment method also provides a backup if a card is lost, blocked, or not accepted.
When exchanging money, always compare the total cost, not just the advertised rate. Check currency-conversion margins, card-loading charges, overseas transaction fees, ATM withdrawal costs, and fees for converting unused money back into Australian dollars.
Travel cards vary considerably, and some low-fee debit cards may offer more competitive rates. Keep cards in separate places, tell your bank about your travel plans if required, and carry only a modest amount of cash.
Most importantly, exchange rates constantly change in response to economic news and market conditions. A favourable rate today could improve further, but it could also fall before you leave or while you are away.
There are no guarantees, and accurately predicting currency movements is extremely difficult. Rather than trying to pick the perfect day, consider a strategy that suits your budget, destination, and tolerance for uncertainty.
Related reading: CHOICE, RBA, MoneySmart
Disclaimer: This article and any links provided are for general information only and should not be taken as constituting professional advice. National Seniors Australia is not a financial adviser. You should consider seeking independent legal, financial, taxation, or other advice to check how any information provided relates to your unique circumstances.
National Seniors Australia Ltd ABN 89 050 523 003 arranges deposits as an authorised representative (AR 282736) of Auswide Bank Ltd (Auswide Bank) ABN 40 087 652 060, AFSL and Australian Credit Licence 239686. Auswide Bank is a wholly owned subsidiary of MyState Bank Limited ABN 89 067 729 195, part of MyState Limited ABN 26 133 623 962. We do not provide any advice based on any consideration of your objectives, financial situation or needs. A target market determination can be obtained at auswidebank.com.au/tmd. Before making a decision to invest, please consider the Terms and Conditions. If you make a deposit, we will receive a commission from Auswide Bank. For more information about our relationship with Auswide Bank please read the Financial Service Guide contained in the Terms and Conditions*. This account is protected by the Financial Claims Scheme. The Scheme is a government-backed safety net for deposits of up to $250,000 per account holder per authorised deposit-taking institution. From 1 December 2025, Auswide Bank is a division of MyState Bank Limited ABN 89 067 729 195 AFSL and Australian Credit Licence Number 240896, a wholly owned subsidiary of MyState Limited ABN 26 133 623 962. From 1 December 2025, combined deposits across Auswide Bank (including deposits originated under the National Seniors brand) and MyState Bank will be covered up to a total of $250,000. Information on the Financial Claims Scheme is available at www.fcs.gov.au
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National Seniors Australia Ltd ABN 89 050 523 003, AR 282736 is an authorised representative of nib Travel Services (Australia) Pty Ltd (nib), ABN 81 115 932 173, AFSL 308461 and act as nib's agent and not as your agent. This is general advice only. Before you buy, you should consider your needs, the Product Disclosure Statement (PDS), Financial Services Guide (FSG) and Target Market Determination (TMD) available from us. This insurance is underwritten by Pacific International Insurance Pty Ltd, ABN 83 169 311 193.
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National Seniors Australia Ltd ABN 89 050 523 003, AR 282736, is an authorised representative of AWP Australia Pty Ltd, ABN 52 097 227 177, AFSL 245631, trading as Allianz Global Assistance (AGA), and acts as AGA's agent and not as your agent. nib Travel Services (Australia) Pty Ltd (nib), ABN 81 115 932 173, AFSL 308461 acts as third party administrator on behalf of AGA, managing claims, complaints, enquiries and sales. This is general advice only. Before you buy, you should consider whether the product is appropriate for you, the Product Disclosure Statement (PDS), Financial Services Guide (FSG) and Target Market Determination (TMD) is available from us. This insurance is underwritten by Pacific International Insurance Pty Ltd, ABN 83 169 311 193, AFSL 523921.
