Bank Term Deposits & How They Help To Make Your Money Grow In Australia
If you remember back to when you were younger, you will recollect that your parents and your grandparents always gave you excellent advice when it came to money. They always told you to make sure that you save some money so that you can put it away in a bank or building society and watch it grow over the years. It was always referred to as ‘rainy day money’ and that same advice applies today now that you are an adult. We know from a very young age that we can get high-interest savings accounts in which to put our hard-earned cash but there are other situations when a term deposit might be a better option.
You want something that is very low risk and bank term deposits are exactly that. The whole procedure involves you putting away money for a certain length of time and that can range from one year to 3 years and even five years. The beauty about a deposit such as this is that you get a guaranteed rate of interest and so you know exactly how much money to expect at the end of the term. If this is a little new to you and you would like to find out more, the following are just some of the reasons why it might be best to put your savings in such an account.
- It is less complicated – There are savings accounts out there that might offer you the same rate of interest as a term deposit but they always come with many different kinds of criteria and there this usually lots of red tape that you have to wade through. For example, you have to deposit a certain amount of money into the account every single month and it might have to come from a linked bank account. They might also ask that you use your debit card a minimum number of times every single month and with a term deposit, there is none of this nonsense so it is an excellent investment opportunity.
- You get a guaranteed return – There is no ambiguity when it comes to the amount of money that you will receive at the end of the term and this is one of the more appealing benefits of a term deposit. If you were to invest in shares or property for example then you never know how much money to expect at the end of any financial year and you do have security with a term deposit as you know exactly how much money will be made.
The other selling point is that an account such as this is extremely low risk and when you have the Australian government providing a guarantee that they will protect your savings up to a certain value then there really is nothing to worry about here. The structure of a term deposit is set up so that you can’t easily access your money like in a savings account and so there isn’t the temptation to spend it on something that you really don’t need.