Australian term deposit rates

Current figures

Average advertised rates ($10,000 benchmark, RBA table F4) and the average rate on new household term deposits (F4.1) · updated monthly. These are official averages and benchmarks - not product offers, and not a comparison of providers.

What these figures are

Term-deposit rates lock a fixed return for a fixed term. The advertised rows are the average rate banks advertise on a $10,000 deposit at each term; the new-deposits row is the average rate actually being paid on household term deposits opened recently - a useful check on whether advertised and achieved rates have drifted apart.

What the term deposit rates table leaves out

The fixed rate on a term deposit is paid for with access. Money is committed for a chosen term, commonly anywhere from one month to five years, and the conditions attached to getting it back early are the substance of the arrangement rather than the small print.

Three conditions decide most outcomes. The first is notice. ASIC’s Moneysmart service warns that an institution may require up to 31 days’ notice before releasing money early, so the money is often not available on the day it is wanted.

The second is the interest penalty. Breaking a term early can mean receiving only a proportion of the interest earned, or none of it, and some institutions charge a fee on top.

The third is what happens when nothing is done at maturity. Many term deposits roll automatically into a new term. That new term carries whatever rate applies on the day it starts, and the notice and penalty conditions apply again to the money now locked into it.

Those conditions are set by the institution rather than by any rule, so they differ, and they are the part of a term deposit that varies most between one and another. A term deposit can only be issued by a bank, credit union or building society that appears on the list of authorised deposit-taking institutions kept by the Australian Prudential Regulation Authority. Products described as being like a term deposit but issued by anything else are not term deposits and do not carry the same protection.

What moves this series is partly how much banks want the money. The Reserve Bank has described how, as the Term Funding Facility it ran during the pandemic matured, banks drew a growing share of their funding from term deposits and issued more debt to replace it. A bank competing harder for term money prices these products differently from one that is not. The series can move without the cash rate moving at all.

Every rate on this page is a rate before tax. Interest on a term deposit is assessable income in the year it is credited, so it is taxed at the depositor’s marginal rate, and the advertised figure is not what a depositor keeps. Two people can hold the identical deposit at the identical rate and end the year with different amounts. The Australian Taxation Office also requires an institution to withhold at the top rate where it holds no tax file number for the account, which turns a missing detail into a materially smaller return.

Longer read: How the yield curve prices a term deposit, and why longer does not always pay more. A longer term does not automatically earn a higher rate, and the reason is visible in the shape of the government yield curve. What sets that shape, and what it means for a fixed term.

Also: What breaking a term deposit costs, and the rollover nobody chooses. A term deposit trades access for certainty, and the price of taking the access back is set by an interest-reduction clause rather than a fee. At the other end sits a rollover that around nine in ten deposits take by default.

Work a deposit through the term deposit calculator, and see the RBA cash rate that drives deposit pricing.

Common questions