Term deposit is a popular investment option among Australians as it offers a guaranteed return on investment and is a safe way to keep away your money for a specific time period.
Most financial institutions offer term deposit accounts. Anyone can open an account as long as they fit the requirements and that they can cater the initial opening deposit for the term of the account they are targeting.
Before you jump into opening a term deposit account, you may want consider your options according to these pointers below:
Investment term includes two types of options; the long term and short term. These investment terms may affect how much interest you can possibly earn upon the maturity time.
What is short term investment?
Short term is an investment term for a fixed period of 3 to 9 months. This is a good investment for those who want to earn from their savings while having the plan to access their funds in instances such as emergency or urgent need of cash.
What is long term investment?
While long term deposit investment is a term with 12 or more months which usually give a higher interest return. It offers a longer lock period of 1 up to 5 years. It requires a minimum investment amount and the longer the investment you take in, the higher the interest return.
Charges and Fees
Australian banks or financing institutions may charge pre- termination costs if you fail to meet the maturity period so it would be necessary to select the investment term option depending on your goal in order to get rid of these fees. Furthermore, it is essential to read and analyze the fine print for you to fully understand the terms and conditions.
Interest rates are what attracts the investors in regards to term deposit investment. While all investment option with similar maturity term, the higher interest rate, the better. Some financing companies complicate matters by including promotional rates with conditions attached. In this regard, make sure to check if these promotions are applicable for you, and suit your current situation before diving in.
Most importantly, evaluate the best term deposit offer available that suits you best.
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