Finding the best term deposit rate in Australia requires looking beyond the Big Four banks. Mid-tier and online-only institutions consistently offer more competitive rates — often 0.5–1.0% higher than CommBank, ANZ, Westpac, and NAB for comparable terms.
Who Typically Offers the Best Rates?
Australia’s term deposit rate landscape divides broadly into three tiers:
Tier 1 — Major banks (CommBank, ANZ, Westpac, NAB)
- Offer term deposits primarily for convenience and existing customer retention
- Rates typically 0.3–1.0% below the market’s best
- Advantage: trusted brands; easy integration with existing accounts
Tier 2 — Mid-tier and regional banks
- ING, Macquarie Bank, Judo Bank, Rabobank, Bank of Queensland, MyState, Bendigo Bank
- Often 0.3–0.8% above Big Four rates
- Covered by the same government guarantee (FCS) up to $250,000
- Less branch access, but full online and phone management
Tier 3 — Credit unions and mutual banks
- Teachers Mutual Bank, Heritage Bank, People’s Choice, IMB Bank
- Can offer competitive rates; returns profits to members
- Best for existing members; less prominently marketed
Institutions That Have Historically Led on Rates
Note: Term deposit rates change frequently. The following reflects general patterns — always check current rates directly.
Judo Bank: A business-focused bank that also offers competitive retail term deposits; has frequently led rate comparisons in 2024–26.
Rabobank: Agricultural bank with competitive term deposit rates; known for consistent rate leadership on 12-month terms.
ING: Consistently competitive across 3–12 month terms; well-regarded for customer service.
Macquarie Bank: Premium bank with competitive term deposit rates; often at or near the top of rate tables for 12-month terms.
MyState Bank: Tasmanian-based; regularly appears at the top of rate comparison tables.
What Rates to Expect in 2026
Following the RBA’s rate cycle, competitive term deposit rates in 2026 are approximately:
| Term | Big Four (approx.) | Best available (approx.) |
|---|---|---|
| 1 month | 3.50–4.00% | 4.50–5.00% |
| 3 months | 3.75–4.25% | 4.75–5.25% |
| 6 months | 4.00–4.50% | 5.00–5.50% |
| 12 months | 4.00–4.50% | 4.75–5.50% |
| 2 years | 3.75–4.25% | 4.50–5.00% |
These are approximate ranges. Actual rates vary by institution and change frequently. Always verify current rates directly.
Where to Compare Term Deposit Rates
Comparison websites (list current rates from multiple institutions):
Directly from institutions: Banks’ websites usually publish current rates. Call or visit for rates on larger deposits (> $250,000) as these may be negotiable.
What to Look For Beyond the Headline Rate
The interest rate is the primary consideration — but other factors matter:
| Factor | Why it matters |
|---|---|
| Interest payment frequency | Monthly payments suit income needs; at-maturity maximises compounding |
| Rollover policy | Automatic rollover at uncompetitive rates is costly — check the rollover process |
| Early withdrawal penalty | How much interest you forfeit if you need funds early |
| Minimum deposit | Some competitive rates require $50,000+ |
| Government guarantee | All APRA-regulated ADIs carry the $250,000 FCS guarantee |
| Compound vs simple interest | Most term deposits pay simple interest; important for >12-month terms |
Is the Highest Rate Always Best?
Not necessarily. A 5.50% rate with a monthly interest payment option may be preferable to 5.65% paid only at maturity if you need regular income. A 5.55% rate from a bank with a transparent early withdrawal policy may be preferable to 5.70% from one with punitive break fees.
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- How to Choose a Term Deposit Australia
- Short-Term vs Long-Term Term Deposits Australia
- Term Deposits hub
Frequently Asked Questions
Which bank has the best term deposit rates in Australia right now? Rates change weekly — use comparison sites like Canstar, RateCity, or Mozo for current data. Mid-tier banks (Judo Bank, Rabobank, ING, Macquarie) consistently offer higher rates than the Big Four. Always verify rates directly with the institution before committing.
Are term deposits at smaller banks safe? Yes — all APRA-regulated ADIs, regardless of size, are covered by the government’s Financial Claims Scheme up to $250,000. There is no safety trade-off between a Big Four bank and a smaller APRA-regulated bank for deposits within that limit.
Can I negotiate term deposit rates? For larger amounts — typically $250,000 or more — direct negotiation with a bank is possible and may yield a higher rate than the advertised product. For smaller deposits, the published rate is usually fixed.
This article provides general financial information only and does not constitute a product recommendation. Term deposit rates change frequently — verify current rates directly with institutions or through a licensed comparison service. For advice tailored to your situation, speak with a licensed financial adviser through the ASIC financial advisers register or MoneySmart.