Interest rate announcement - 12 August 2022. Bank Australia will increase variable home loan and commercial variable rates in response the RBA’s recent decision to raise the official cash rate. From 18 August 2022, interest rates will increase by 0.50% for variable rate owner-occupier and investor loans, while commercial variable rate loans will also increase by 0.50%. For existing home loan customers, repayment changes will be effective from 1 October 2022. Read more here.

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2022-04-28 10:05 am
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Term deposit vs savings account which is right for you

June 1, 2022
August 1, 2018

Saving for a holiday? A house? A major life event? Or just for a rainy day? There are a few options when it comes to making the most of the money you have, each with slightly different pros and cons. The two most common pathways are either a term deposit or a bonus savings account.

We’ve put together some pros and cons of each to help you weigh up which one is right for you.

Term deposit

Fixed term deposits offer a guaranteed rate of return on your money for the life of an investment. They are also a low maintenance option, you can just set and forget!


  • Your savings are locked away, which means you won’t be tempted to touch it
  • You’ll commonly get a higher interest rate than online savings accounts
  • Interest rate remains fixed for a set period so you’ll be able to calculate how much you’ll earn
  • At Bank Australia, you have the choice of monthly interest or interest at maturity (the end of the agreed term e.g. 6-months)


  • Fees can apply if you wish to access your savings before the term deposit matures
  • You don’t benefit from interest rate rises, say if rates rise mid-term (which is why most people opt for a 3 or 6-month term.

Bonus savings account

More often than not, bonus savings accounts offer a base rate of interest as well as bonus interest if you stick to the withdrawal/deposit conditions of the account. Most banks offer these types of accounts but with varied interest rates. See the current interest rate on our Bonus Saver.


  • You can earn a high rate of interest on a small balance – start with $100 and build from there with a $100 a month deposit
  • Your savings are accessible if you do need them (but you lose your bonus interest)
  • Getting bonus interest can encourage you to save if don’t make any withdrawals and deposit a minimum of $100 during the month.


  • Interest rates on savings accounts are typically lower than fixed term deposits and they can change at any time.
  • If you access your funds during the month, your forfeit bonus interest. Base interest rates are generally low, so your return could be modest.

Take out a term deposit and have a look at some of our frequently asked questions about term deposits.

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