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Keeping your money in a bank account, whether it’s a savings account or term deposit, is an investment, so it’s worth making sure you’re getting the most out of it. Get the best return on your deposit by considering the following things.

Understand how interest works

The amount of interest you earn depends on how much money you have in your account, the interest rate, type of interest and how often interest is paid. The two types of interest that can be applied are 'simple' interest or 'compound' interest.

Simple interest is calculated on the principal amount. Compound interest is also calculated on the principal amount but then added to your account balance so that over time you are also earning interest on your interest.

How often interest is calculated can also make a big difference to your interest earnings. This can vary, but most banks calculate your interest on a daily basis and add it to your account once a month. You can use our Saving Calculator tool to see how much interest you could earn.

Everyday banking accounts

Although you might not think of it as one, your everyday account can be an investment. Occassionally, an everyday bank account will accrue interest when you deposit or maintain a specified minimum amount each month. This type of account pays the lowest interest rate, but it gives you instant access to your money.

Look for high interest accounts

Most financial institutions offer high interest savings accounts. If you’d like to have a dedicated bank account to save towards a specific goal or put aside money for a rainy day, but you want to still be able to access your funds, a savings account may be a good option for you.

As they offer a higher interest rate than an everyday account, these accounts don’t usually come with debit cards so it’s not easy to withdraw your savings. They may offer bonus interest payments based on regular deposits and not making withdrawals so always check the terms to make the most of your savings account.

Consider a term deposit

A term deposit normally produces the highest rate of return. With a term deposit, you invest a minimum amount for a set period of time, at a rate which is locked for the duration of the set term. If interest rates drop, you’ll continue getting the same rate of return, but if you need to withdraw any of the funds before the term expires, you’ll receive a lower interest rate for the entire term.

If you have a lump sum that you would like to grow, then consider whether a term deposit is right for you.


Banking and Credit products issued by Police & Nurses Limited (P&N Bank) ABN 69 087 651 876 AFSL/Australian Credit Licence 240701. Any advice does not take into account your objectives, financial situation or needs. Read the relevant T&Cs, before downloading apps or acquiring any product, in considering and deciding whether it is right for you. The Target Market Determinations (TMDs) are available here or upon request.