Term deposits vs savings accounts

A savings account pays a variable rate on money you can move any time. A term deposit pays a fixed rate on money you have agreed to leave for the term, subject to the product’s early-withdrawal conditions.

Access. You can add to a savings account and take from it whenever you like.

Conditions. Moneysmart notes that many savings accounts pay a bonus rate only if you meet conditions, such as depositing a set amount each month or making no withdrawals, and that some pay a higher introductory rate for a short time before dropping to a lower one. A month that misses a condition earns the base rate. A term deposit has no monthly conditions, though its own product and withdrawal terms still apply.

Rate changes. The bank can change a savings rate at any time, in either direction, and does not have to pass on a cash rate change in full. A term deposit rate is set once for the term.

Certainty about the rate. It cannot be cut mid-term, and the payment schedule is agreed in advance.

Separation. The money is deliberately out of easy reach for the term, which some people count as a feature.

Money that is still being added to, or that may be needed at short notice, is easier to hold in a savings account. Money with a fixed date can be matched to a term deposit that matures then. The government guarantee covers eligible deposits in both kinds of account at an Australian-incorporated ADI, up to $250,000 per account holder per institution, so safety within the limit is not what separates them.

Compare the numbers rather than the labels. On 10 Oct 2026 the highest comparable twelve-month rate in this snapshot was 5.60%, and the median of the 75 ranked brands publishing that term was 5.25%. A savings account’s headline bonus rate may be higher or lower, and it only counts in the months the conditions are met.