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Where are the best rates across Cash Accounts & Term Deposits for May 2023 💰🏦

After what many experts say was a surprise rate increase in May by the Reserve Bank of Australia, we explore the best rates available for older Australians looking to park their cash with a bank savings account or term deposit. Unfortunately, but not surprisingly, the majority of rates did not follow the RBA in increasing their rates, but there were a few that did.

In any case, here are some of the highest interest rates currently available in Australia for savings accounts and term deposits, based on the products across a range of comparison websites.

 

Top 10 Savings accounts with high interest rates in May

For older Australians we’ve found the below bank savings accounts currently offer the highest rates in Australia (as at 6 May 2023).

Bank of Queensland – Smart Saver @ 4.85%
Conditions: Age over 35. Deposit $1,000+ into linked account and make 5+ purchases per month

Rabobank – High Interest Savings @ 5.15%
Conditions: 4-month intro period. No regular deposits or purchaes.

Bank of Queensland – Simple Saver @ 4.80%
Conditions: 4-month intro period. No regular deposits or purchaes.

AMP Bank – Saver @ 4.80%
Conditions: Deposit $1000 in previous month

ubank – Save @ 4.60%
Conditions: Deposit $200+ every month into any linked account

NAB – iSaver @ 4.50%
Conditions: 4-month intro period. No regular deposits or purchaes.

Commonwealth Bank – NetBank Saver @ 4.50%
Conditions: 5-month intro period. No regular deposits or purchaes.

Great Southern Bank – Advanced Saver @ 4.50%
Conditions: Grow balance by $250 per month.

HSBC Bonus – Savings Account @ 4.50%
Conditions: Grow balance by $300 per month.

 

 

Term deposits – Which bank has the best rates in May?

Based on Finder’s website, below are their best term deposits over 3, 6 and 12 months for the month of May.

Best 3-month term deposit rates

Best 6-month term deposit rates

Best 12-month term deposit rates

 

Term deposits for $100k+
If you’re got a large balance of $100,000 or more, make sure you look for a term deposit that can be opened for larger balances. Some term deposits are only for smaller deposits of $10,000, $25,000 or $50,000 max.

Here are a few of the best 12-month term deposit rates for balances over $100,000:

 

Between 12 months to 5 years?
If you’re looking to put your money in a term deposit for a longer period, Mozo says Judo Bank is the current TD leader across all terms lengths. The 12-month rate is the only term deposit that has increased from last month, from 4.60% to 4.75% p.a.

Here are Judo’s rates below as of 1 May:

  • 4.75% p.a. for a 1-year term
  • 4.85% p.a. for a 2-year term
  • 4.90% p.a. for a 3-year term
  • 4.90% p.a. for a 4-year term
  • 5.00% p.a. for a 5-year term

 

Once you have your shortlist, another good practise is to work out the actual amount earned at the maturity date of each term deposit. Because moving your money out of one bank and into another can be arduous, and in the end it may only earn you an extra $50 over the period.

Before deciding on a term deposit, please be mindful that other providers are offering similar rates so it’s always a good to idea to research your options and compare rates, features and terms and conditions, and to consider seeking the advice of a suitably qualified professional. For example, other competitive bank rates 12 months and longer based on Canstar’s website:

12-months

  • 4.75% p.a. at Orange Credit Union
  • 4.70% p.a. at Bank of Sydney
  • 4.65% p.a. at Judo Bank
  • 4.65% p.a. at AMP Bank
  • 4.60% p.a. at Firstmac
  • 4.60% p.a. at ING
  • 4.60% p.a. at Bankfirst

24-months

  • 4.85% p.a. at Judo Bank
  • 4.65% p.a. at G&C Mutual Bank
  • 4.60% p.a. at AMP Bank
  • 4.60% p.a. at ING
  • 4.55% p.a. at Qudos Bank

5-years

  • 5.00% p.a. at Judo Bank
  • 4.70% p.a. at AMP Bank
  • 4.50% p.a. at BankVic
  • 4.50% p.a. at G&C Mutual Bank
  • 4.40%* p.a. at Citi

 

 

Pros and cons of term deposits

Pros

  • Term deposits offer a fixed rate, so you can guarantee your exact return.
  • Term deposits have no set up fees, account keeping fees or ongoing conditions to meet.
  • Term deposits are backed by the Australian government bank guarantee scheme.
  • You can choose between a large range of term deposit lengths, from 1 month to 5 years.

Cons

  • Fixed rate means, you won’t benefit from rising interest rates until your term matures.
  • Term deposits offer simple interest, not compound interest.
  • Many term teposits offer rates that are equal to or even lower than savings accounts.
  • Withdrawing money early incurs penalty charge and/or forfeits interest.

Is money safe in a term deposit?

All term deposits (listed on this page) are covered under the Australian government’s financial claims guarantee scheme. This scheme provides protection for deposits up to $250,000 with authorised deposit-taking institutions (ADIs), such as your bank, mutual bank or credit union, in the event that the ADI fails.

However, please be careful of unfamiliar businesses advertising extremley high returns as these are often unsecured with no government gaurantee, or are fraudulent. As they say, if it’s “too good to be true”…

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