How to apply for a term deposit

Putting your money into a term deposit means locking it away for a pre-determined period at a fixed rate of interest. That way, you’re guaranteed a certain return while protecting your investment from volatile market shifts.

Although interest rates tend to be lower than you’ll get with higher-risk strategies, a term deposit provides a stable base to plan your budget, establish an investment fund or draw a set income from the interest you make.

Here’s how to get a term deposit up and running.

 1. Compare your options

Before you sign up for a term deposit, it’s important to consider your options and compare the different products available to you. By comparing term deposit options at each financial institution you can find an interest rate, account type and term length that suits you.

2. Choose your product

Most financial institutions let you apply for a term deposit account online, over the phone or in person at a branch. Some lenders require you to hold an existing transaction account with them before opening a term deposit, and most offer a schedule of fixed interest rates for various set terms, so choose your product carefully and compare all the term deposit products on the market to find the best fit for your goals.

3. Prove your identity

The financial services provider you choose will need to verify your identity in order to open a term deposit in your name. That means you’ll likely need to provide your name, residential address and date of birth via a driver’s licence, passport or birth certificate. Some providers offer electronic verification for online applications.

4. Authorise your account

Some financial services providers may ask you to electronically authorise your term deposit if you are sole trader or acting on behalf of a partnership, company, trust or association. Authorised signatories may be required to transfer money from an external bank account into a term deposit.

5. Make a deposit

You’ll need a lump sum to place into the term deposit, and some lenders require a minimum amount in order to open the account.

Setting up a term deposit can be an effective way to boost your savings or set up an investment fund for your future. Start searching and comparing term deposit offers now, or use our InfoChoice savings calculator to estimate how much interest you could earn.