Term Deposits are back in fashion!
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I have been considering a term deposit for quite a while now, ever since there was great market volatility in Australia from 6 months ago until now. What are my reasons for considering a term deposit? That is what I would like to look at as term deposits are very much back in fashion this year and they will provide you with a good 6-12month investment strategy while the current market situation rides the waves of the storm.
Key points of term deposits article;
- Benefits of Term Deposits
- Why use Term Deposits
- Investing with Term Deposits
- Term Deposits or High Interest Saving Accounts
Benefits of Term Deposits
Term deposits are a way of saving money into a specified account. The benefits of term deposits are that your money is extremely safe and locked away for a set period of time at an agreed upon interest rate.
Why use Term Deposits?
They are safe to use, you will not lose your money, you will not be able to access the money for a set period of time (which is good for us people who tend to scoop savings out occasionally) + term deposits generally offer higher interest rates for larger returns on your money.
Investing with Term Deposits
If you are interested in investing your money into a term deposit, I would suggest looking around and using sites such as Money Manager to find the highest interest rates and lowest fees. Please note that you should not be charged a fee for term deposits, so if the one you are looking at does - i suggest you keep looking around. Raboplus tend to have quite good term deposits.
Term Deposits or High Interest Saving Accounts
This is the big question, to put in a high interest savings account or a term deposit. I would use a high interest account over a term deposit if you need to readily have the funds available. If you wish to put the money out of reach for a set period of time, then I would suggest a term deposit as that way you cannot touch it, you cannot spend it, and your savings will continue to grow. It all depends on how good you are with money.
Term deposits are by far the safest form of investments for those of us with decent cash flow.
The market unease is making these kinds of investments quite popular here in Australia as term deposits are safe, easy to use and provide decent returns for those of us with enough cash invested.