When will term deposit rates go up?

Will term deposit rates go up this year?

It's unlikely that term deposit rates will go up in 2025. Some banks may offer special, limited-time offers of higher rates for select term lengths, however on average term deposit rates rates are likely to go down.

Why are term deposit rates falling?

The main reason term deposit rates are going down is because the official cash rate (which is set by the RBA) has started to go down. The RBA cut the cash rate in February 2025 for the first time in more than 3 years due to inflation going down.

If inflation stays within the RBA's target range, we may see more rate cuts throughout the year which would mean term deposit rates continue to fall.

When the RBA cuts the cash rate it forces banks to lower their home loan rates. Because banks are making less money in interest from mortgages, they then have to reduce the interest paid out to people with term deposits and savings accounts.

How low will term deposit rates go?

This depends on how low the RBA's cash rate goes, and how low home loan rates fall.

Finder analysis found that term deposits were delivering an average rate of return of 2.45% p.a. to Australian savers in early 2017. That was the lowest average return on record since 2002, when the RBA first started collecting this type of data.

But compared to rates in 2021 and 2022, a rate over 2.00% p.a. looked very competitive! In December 2021, the cash rate was at a record low of just 0.10% and term deposit rates were, on average, below 1% p.a.

We have a long way to go before the cash rate gets this low again.

Our expert says: Term deposits offer fixed rates

"The beauty of a term deposit is that they offer fixed interest rates, meaning once you open your account the rate is locked for the length of the term. There are still some strong term deposit rates on offer for 3-5 year terms and, if you lock in your rate today, it doesn't matter if rates continue to fall because your rate won't be impacted."

Alison Banney

Editorial Manager, Money

See current term deposit rates

1 - 3 of 157

Updated regularly

Sort by:Please select

3 Mths p.a. (low-high)3 Mths p.a. (high-low)4 Mths p.a. (low-high)4 Mths p.a. (high-low)5 Mths p.a. (low-high)5 Mths p.a. (high-low)6 Mths p.a. (low-high)6 Mths p.a. (high-low)7 Mths p.a. (low-high)7 Mths p.a. (high-low)12 Mths p.a. (low-high)12 Mths p.a. (high-low)24 Mths p.a. (low-high)24 Mths p.a. (high-low)

Product	3 Mths p.a.	4 Mths p.a.	5 Mths p.a.	6 Mths p.a.	7 Mths p.a.	11 Mths p.a.	12 Mths p.a.	24 Mths p.a.
Promoted Newcastle Permanent Term Deposit $1,000 min. deposit	3 Mths p.a. 4.00%	4 Mths p.a. 4.00%	5 Mths p.a. 4.00%	6 Mths p.a. 4.65%	7 Mths p.a. 3.80%	11 Mths p.a. -	12 Mths p.a. 4.45%	24 Mths p.a. 4.00%	Lock in a rate as high as 4.65% for 6 months with a minimum $1,000 deposit.	Go to siteMore info Compare	loading Fetching your data...
Promoted Judo Bank Term Deposit Finder Award $1,000 min. deposit	3 Mths p.a. 4.75%	4 Mths p.a. -	5 Mths p.a. -	6 Mths p.a. 4.80%	7 Mths p.a. -	11 Mths p.a. -	12 Mths p.a. 4.50%	24 Mths p.a. 4.30%	You can get competitive interest rates on all term lengths. This term deposit has a low minimum deposit amount and is a 2025 Finder Award winner.	Go to siteMore info Compare	loading Fetching your data...
Promoted Community First Bank 6 month Term Deposit Offer $50,000 min. deposit $1,000,000 max. deposit	3 Mths p.a. -	4 Mths p.a. -	5 Mths p.a. -	6 Mths p.a. 4.80%	7 Mths p.a. -	11 Mths p.a. -	12 Mths p.a. -	24 Mths p.a. -	Go to siteMore info Compare	loading Fetching your data...

loading

Compare other products

We currently don't have that product, but here are others to consider:

How we picked these

Why do term deposit rates fall with the RBA cash rate?

The cash rate is Australia’s benchmark interest rate, so any changes the RBA makes to this figure are commonly passed on to the products offered by Australian banks. So while the current low rates aren't great news for home loan borrowers, they mean that savers are get a better return on their term deposit investments.

However, it’s worth pointing out that a cut to the cash rate doesn’t necessarily mean lower term deposit rates. Sometimes, banks choose to keep their term deposits rates as they are or, in rare situations, increase their rates. There are several possible reasons behind this move, including:

• Putting pressure on smaller financial institutions in the term deposit market
• Generating more funding to cover an increased demand for fixed-rate home loans
• Providing protection against overseas financial turmoil by reducing reliance on overseas funding sources

What other factors affect term deposit rates?

There are several factors that have an influence on how banks set their term deposit rates in addition to the cash rate, including:

• What the competition is doing. Australia’s banking industry is highly competitive and the major banks are always looking for ways to steal customers from their rivals. A quick comparison of term deposit rates across the major banks reveals just how competitive the deposit market is, and a bank will consider how its products compare to those offered by other financial institutions when setting rates.
• The bank’s financial position. If your bank is looking to improve its financial position, it may want to increase the amount of funding it receives from term deposits. In an effort to increase its share of the Australian term deposit market, it might increase the rate it offers on specific term deposits to entice new customers away from its competitors.
• The global economic climate. Banks also make interest rate decisions based on future economic forecasts. For example, a bank may choose to protect itself from overseas financial turmoil by reducing its reliance on funding from overseas sources and at the same time increasing its funding from Australian deposits. In order to do this, it may raise its term deposit rates relative to the competition.

How to get a better term deposit rate right now

Regardless of the RBA’s official cash rate and average term deposit rates, there are still several things you can do to increase the interest-earning capacity of a term deposit:

• Shop around. Although average term deposit rates may be at record lows, there’s still a substantial difference between the lowest and highest rates on offer at any given time. With this in mind, it’s essential to compare a range of term deposit options and shop around for the highest interest rate you can find.
• Look beyond the major banks. Australians have a tendency to remain loyal to their regular bank, which is more often than not a Big Four bank, even if it doesn’t offer the best interest rate. However, some of the best term deposit deals can be found at Australia’s smaller banks, credit unions and building societies, so don’t be afraid to look beyond the Big Four for a good deal.
• Consider investing for longer. You will typically be able to find slightly higher rates on deposits with longer terms than on those with shorter terms. If it’s convenient for you to lock away money in a term deposit for 12 months or more, you will be able to enjoy higher interest-earning power.
• Invest a larger amount. The larger the amount of money you have to invest, the higher the interest rate you will receive. Many banks offer tiered interest rates for term deposits – for example, they may offer a base interest rate for deposits of up to $10,000, a slightly higher rate for deposit amounts of $10,000 to $25,000, and a higher rate again on amounts of $25,000 or more.
• Negotiate. If you’ve got $100,000 or more to invest, many financial institutions may be willing to let you negotiate a better rate. The more money you have to invest, the greater your bargaining power, so don’t be afraid to ask for a better deal.
• Use a high interest savings account instead. Although current term deposit rates are at record lows, things won’t stay that way forever and rates will rise again at some stage. So rather than locking all your money away in a term deposit for an extended period, it may be worth investing a portion of your funds in a high interest savings account so that you can easily access it if term deposit rates go up.

Frequently asked questions

• Is it worth putting money in a term deposit?

  Term deposits are a safe way to earn a fixed interest rate on your savings. They are ideal if you prefer low risk and want guaranteed returns, but they usually offer lower returns than riskier investments like shares.

• What is the best term deposit in Australia?

  The best term deposit in Australia depends on the interest rates, fees, and conditions offered by each bank. It's recommended to compare current rates across banks to find the best option for your needs. As of eary 2025, a term deposit that offers a rate of 4.5% or more is considered quite a good return.

• What are the big 4 bank term deposits in Australia?

  The Big 4 banks (ANZ, Commonwealth Bank, NAB, and Westpac) offer term deposits with varying interest rates and terms that change constantly. It's best to visit their websites for the current rate. Typically, they provide competitive, secure term deposit options, but their rates may be lower than smaller banks.

• Is it better to put money into super or term deposit in Australia?

  Superannuation can provide higher long-term returns due to compound interest and market exposure, while term deposits offer guaranteed returns. Super is often a better option for long-term return, while term deposits suit short-term goals. Keep in mind, any money deposited into super can not be accessed until retirement, so a term deposit might be a better option if you'll need access to your money.

• What is a disadvantage of term deposits?

  A key disadvantage of term deposits is that your money is locked away for the term's duration, limiting access to funds without penalty. Additionally, returns are usually lower compared to other investment options like shares.

Written by

Tim Falk

Writer

Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio

Co-written by

Alison Banney

Editorial Manager, Money

Alison is an editor at Finder and a personal finance journalist with over 10 years of experience, having contributed to major financial institutions and publications such as Westpac, Money Magazine, and Yahoo Finance. She is frequently quoted in media outlets like SmartCompany and SBS, offering expert insights on superannuation and money management. Alison holds a Bachelor of Communications in Public Relations and Journalism from the University of Newcastle, and has earned three ASIC RG146 certifications in superannuation, securities and managed investments and general financial advice, ensuring her expertise is fully aligned with ASIC standards. See full bio

Alison's expertise

Alison has written 644 Finder guides across topics including:

• Superannuation
• Savings accounts, bank accounts and term deposits
• Budgeting and money-saving hacks
• Managing the cost of living