You choose: term deposit or savings account?
When it comes to managing your money, choosing the right type of account can make a big difference.
Sponsored Story
Two popular options for older Australians looking for safe and reliable places to keep their savings are savings accounts and term deposits.
While both offer security and a way to earn interest, they have key differences that may influence your decision.
A savings account is a bank account designed for storing money while earning interest. You can deposit and withdraw funds at any time, making it a flexible option for those who may need access to their money on short notice.
Key features of a savings account:
Accessibility: You can deposit and withdraw funds whenever you need them.
Variable interest rates: The interest rate can change based on market conditions.
Online banking: Most savings accounts offer easy access through internet banking and mobile apps.
Bonus interest options: Some accounts reward you with higher interest if you meet certain conditions, such as making no withdrawals or depositing a minimum amount each month.
A savings account is ideal if you want easy access to your money while still earning interest.
National Seniors Term Deposit
With no fees and flexible terms, the National Seniors Term Deposit allows you to lock in a competitive interest rate that’s protected for your fixed term.
You can earn competitive interest rates up to 4.50% per annum.
National Seniors members can earn a special rate of 4.40% for 5 months or 4.50% for 6 months on maturity for term deposits over $5,000.
A term deposit is a type of savings account where you lock away a fixed amount of money for a set period, known as the “term”. In exchange, you receive a fixed interest rate, which remains unchanged for the duration of the term.
Key features of a term deposit:
Fixed interest rate: Your rate won’t change during the term, providing certainty on your returns.
Set timeframe: Terms can range from a few months to several years.
Limited access: Withdrawals before the term ends may result in loss of interest or other penalities.
Low risk: Since your money is locked away, you are protected from interest rate fluctuations.
A term deposit is ideal for those who don’t need immediate access to their money and want a predictable return.
The choice between a savings account and a term deposit depends on your financial needs and goals.
Choose a savings account if you want flexibility, plan to make regular withdrawals, or prefer an account that can grow with bonus interest.
Choose a term deposit if you have a lump sum you won’t need for a while and want a guaranteed return without worrying about market fluctuations.
For many seniors, a combination of both may be the best approach. A savings account can provide quick access to funds, while a term deposit ensures a portion of your money grows safely over time.
By understanding the differences, you can make an informed decision that suits your financial future.
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 Australian Government deposit guarantee. Up to $250,000 of deposits in ‘protected accounts’ held by an entity with Auswide Bank are covered under the Financial Claims Scheme. Information on the Financial Claims Scheme is available at www.fcs.gov.au
