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Term deposits are a great way to earn reliable and safe returns. When your term deposit matures, what you do next can really impact your finances. Many banks will automatically roll over your deposit for another term but often at a lower interest rate. While this is easy, it might not be the best option for you.
To get the most out of your investment, it’s important to know when to reinvest and when to look for better rates elsewhere.
What Does "Rolling Over" Mean?
Rolling over a term deposit means putting the original amount (and maybe some interest) into a new term deposit when it ends. Most banks will notify you close to the maturity date, giving you a short window—often just a few days—to provide new instructions.
If you do nothing, your funds are automatically rolled over at the bank’s current interest rate and for a similar term. This is where many people lose out, as rollover rates are often less competitive than what’s being offered to new customers.
When to Reinvest with the Same Provider
Putting your money back with your current bank can sometimes be a smart move. Consider rolling it over if:
- They offer a solid rate for the new term.
- You're happy with their customer service and online features.
- You prefer to keep things easy without transferring your money.
Before you make any changes, remember to negotiate. Some banks might match or even offer better rates if they see you exploring other options.
When to Switch Providers
Switching banks can be a best idea if -
- The new interest rate is much lower than what’s out there.
- You come across a better deal, especially from online banks.
- You’re looking for a different term length or more flexibility.
Online banks have become big players in the term deposit market. For example, judo bank often offers term deposits with rates that beat many traditional banks.
Judo bank is an Australian digital bank that specializes in term deposits and business banking. What sets them apart is their simple online application process, competitive fixed-rate products and focus on delivering value to savers rather than just relying on loyalty or inertia.
Tips Before You Roll Over or Switch
- Check Rates: Take some time to see what other banks are offering. You can use comparison websites or just check out trusted online banks like judo.bank for their current deals.
- Mark Your Maturity Date: Most banks give you a short window to make changes before they roll over your deposit. Note that date.
- Check Before You Switch: Don’t assume your old rates and terms will roll over. Check the details before you agree to anything new.
- Ladder It: Instead of putting all your money in one deposit term, try spreading it out over different terms. That way you’ll have some cash available while still earning interest.
