High Interest Term Deposit Accounts

With all the uncertainty amidst the global financial crisis, many Australians are unsure of the best way to invest their money - safely. High Interest Term Deposit Accounts offer a commonsense, safe approach to investing your hard earned cash.

Why choose a term deposit account?

Many people choose this type of investment because they can be totally certain as to exactly how much interest they will earn on their investment. These accounts are similar to your average savings account, except that you cannot take the money out for a certain amount of time. This period of time can be as little as six months or as long as several years. Since the banks know exactly how long they will have your money, they can invest it, and ensure you a certain return on your money. In general, the longer the you let the bank keep your money in the account, the more interest you will earn.

What features should you look when opening your account?

1. Choose a bank that is reputable, and shop around for the highest paid out interest rates that you can find. Current rates are between 4 and 5% p.a.; the interest rates will always be fixed for the investment's term.


2. You should not have to make a huge investment. Most financial institutions will require that you invest as little as $500 to start your account.


3. You should be able to open your account for free and you should not have to pay an annual fee.


4. You will be able to choose whether you would like the interest paid at maturity or annually. Many banks will offer the option to be paid interest ever month or six months.

Is a term deposit account a safe way to invest your money?

Time deposit accounts are one of the safest ways to invest your money. Since they offer investors a guaranteed rate of return for the life of an investment, many people choose this type of investment. You may earn less money in interest than other types of investment, but you experience virtually no risk that you will lose your money. For this reason, term deposit accounts are very popular among conservative investors.

Finally, deposits up to one million dollars are automatically guaranteed by the Australian Government free of charge, thanks to the Financial Claims Scheme. If you invest over a million dollars, you have the option of having your investment guaranteed if you pay a fee.

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