If you have some money saved and are looking to earn more interest than what you're getting in your everyday account, you might want to consider a long term deposit. If you're not sure how long to lock your funds away for, here's some information that can help you make an informed decision.
A fixed term deposit is an investment option with a fixed interest rate. You choose the amount of time (the "term"), and your money is untouchable until this term is up. Your money earns a set amount of interest during this period.
Whilst not set in stone, a long term deposit generally means you are locking your money away for one year or more, and up to a period of five years. With a long term deposit you can generally choose to have the interest you earn paid into your savings account monthly, quarterly or annually.
Some of the other benefits of a long term deposit are:
If you're still not sure about long term deposits, there are a few things to consider. Longer term deposits are popular with retirees planning for the years ahead, and when interest rates are either decreasing or declining. You want to maximise your return, and you can do this through careful planning.
Remember, when you acquire large sums of money, or are planning for your retirement you should always consult a financial planner to see what option is best for you and your family.
A short term deposit usually starts at a term of 2 or 3 months up to a year. You could use this as a trial run before you invest in a long term deposit. Some of the other benefits of a shorter term of deposit include:
If you're looking for a low risk and low maintenance savings option, then a long term deposit could be the way to go. You can put your money into one account and benefit from having regular interest income over the term of the deposit.
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