A: A term deposit is a type of savings account, where you lock away an amount of money for an agreed length of time (a 'term'). This means that unless your term matures, the only way to access your funds is by paying a penalty fee. During your term, you're guaranteed a set interest rate for the length of the term you chose. This way, you can be sure of what return you'll get on your investment.
A: Interest can be paid monthly, annually or at maturity. Term Deposit interest is calculated on the daily closing balance of the account and can be credited (compounded) to the term deposit account annually or on maturity. Term deposits lodged for more than 12 months must have interest paid at least every 12 month period as well as at maturity and can be compounded to the principal. Monthly interest payments cannot be compounded to the principal.
A: Selecting the right interest payment frequency for your Term Deposit is important as it impacts how much interest you earn at the end of term.
If you opt to be paid monthly - interest earned on your deposit gets paid to you monthly for the length of your term. This option often comes with a lower interest rate.
If you opt to be paid at maturity - interest is paid as a lump sum payment at the end of the term of your deposit. This option generally comes with a slightly higher interest rate.
A: When you open your term deposit you can choose to:
If you wish to adjust any of these details, you may do so in writing any time during the term. Prior to maturity, we will also write to you approximately one week before maturity to confirm your instructions including the term and interest rate.