What is a term deposit?

term deposit
What is a term deposit?

If you’re a New Zealander and like to keep your finger on the pulse when it comes to your finances, then term deposits are something that will leave you gleaming from ear to ear.

Quite simply defined, term deposits will earn you high-interest rates on your savings accounts while minimising risks and all with the utmost convenience and ease!

Sounds too good to be true? Rest assured it’s not. All you need to do is simply select the amount you wish to save, the period over which you want to save money and then lean back in your favourite chair, drink your coffee (or tea) and let your money make you more money!

It still sounds amazing, and not to say that New Zealanders are sceptics, but what’s the catch? There isn’t one. In the economy, as things go, rates fall and they rise, however, the amount of interest you earn won’t change at all. It remains the same right until the end date of the investment. You are therefore guaranteed a return on investment.

You determine the terms of your new investment

How great is it that we still have the option to tailor our own investments and aren’t controlled by other preconditioned terms set by others? It’s not always the case, but in this case, it certainly is. You can choose a period that isn’t too long or too short to suit your financial situation. You might not want all your funds tied up for more than a year, or perhaps you are happy to let it grow for the next 5 years! Whichever it is, you have that choice.

The vast majority of New Zealand banks offer terms that range from 1 month to 5 years. This flexibility will cater to all kinds of financial goals both short-term and long-term. A holiday might mean saving for a short period where a little extra earned interest will help make the holiday a little easier. Or perhaps you’re simply trying to put away money and grow to suit your retirement period which could be many years from now. The bottom line is that term deposits are highly flexible, so make sure to carefully consider what it is you’re saving for!

There’s no delay, start saving today!

Your phone’s ringing off the hook and your boss just called an emergency meeting, but all you can think about is getting your term deposit set up so that you can start saving for the things you need! It’s time to take control of your financial needs and get saving today, but how, with all the in-your-face stimuli, which include the left and right pulls of your job and friends? It’s quite simple, take to the internet, and find an online application. It’s important in today’s rushed-off-our-feet lifestyles, that we make the time to tend to the necessary financial decisions and investments that we know will ultimately contribute to our happiness and success. Some of the major banking institutions have preloaded forms that you can complete and easily submit from your smart device while on your way to that important meeting.

It’s in your best interest to earn the best interest

You might think that simply investing is the most financially savvy and clever thing you’ve done all year. But have you considered the fact that your investment amount and the period you’re investing over could very well count against your incredible idea for earning money this easily?

Choosing the wrong lender and potentially an unfavourable term, you could end up not earning as much as you’d hoped. Typically, a lender will pay out the earned interest monthly, quarterly, half-yearly, annually, or at the end of the term. If you’re impulsive when it comes to spending, you might want to hold out on receiving any interest until the term is over. Shopping is addictive, and sales literally get your dopamine levels all over the show, so it’s best that you consider different investment opportunities. If, however, you opt to have the interest paid out earlier, you can reinvest this money somewhere else.

My investment is about to pay out, what now?

How did you get here? It was just the other day that you invested that amount which now seems like a chump change compared to what you’d invest if you did today. It’s time to make a call. You’re either falling over yourself to get to the bank to draw it out for those long-awaited desires that you put on the back burner, or you are kind of in a position where you can casually shrug your shoulders wondering whether you really need it right now.

Either way, you have options. One option is to simply request that the total amount in the investment be transferred directly into your account to go and splash out a little, settle a debt or simply draw it out and shove it under your mattress. The point is you can do with it what you want. The alternative is to consider reinvesting in another term deposit.

There is a range of term deposit products available to New Zealanders, so take the time to shop around for the best rate and make your money work for you!

Popular & reliable direct lenders offering Car finance

  1. The Lending People Car loan

    The Lending Peo...

    • Loans up to $200,000
    • Term up to 7 years
    • Interest from 6.95%
  2. First Credit Union Car loan

    First Credit Un...

    • Loans up to $10,000
    • Term up to 5 years
    • Interest from 9.95%
  3. ANZ Car Loan Car loan

    ANZ Car Loan

    • Loans up to $40,000
    • Term up to 5 years
    • Interest from 13.90%
  4. UDC Car loan


    • Loans up to $500,000
    • Term up to 5 years
    • Interest from 8.95%