Term deposits

[Bez]

Hey guys,
Iv just been thinking what makes a term deposit different from a online savings account ? eg. Netsaver, Isaver etc ?

From what iv seen they both have very similar interest rates

There must be more to it that I dont no about.

 

[alexlee]

Hey guys,
Iv just been thinking what makes a term deposit different from a online savings account ? eg. Netsaver, Isaver etc ?

From what iv seen they both have very similar interest rates

There must be more to it that I dont no about.

Term deposits, as the name implies, are fixed for a period. If you want to withdraw money prior to the end of the term, there are often penalties.

With an online savings account, the money is at call, so you can get it back whenever you want. As for why you would choose a term deposit over an online savings account if they have the same rate, you wouldn't. High interest online accounts have really supplanted term deposits. Used to be you needed term deposits to get more interest.
Alex

 

[Bez]

Alex your always the first to reply to my posts lol

Thats exactly what I was thinking aswell, cheers..

 

[chrispy]

Term deposits are very useful if you want to defer interest into the next financial year

Chris

 

[GreatPig]

And banks like ING will pay more for a term deposit than their linked Internet account.

From their recent bit of email, the standard rate for the linked account is now 6.4% but they have a 90 day term deposit for 7%, and up to 7.6% for 2 years.

GP