Term length and returns: how long to lock in

Banks set each term separately against market rates for that horizon. When the market expects rate cuts, longer terms can pay less than shorter ones. In the snapshot read on 10 Oct 2026 the highest comparable rates were 3-month 5.25%, 6-month 5.45%, 1-year 5.60%, 2-year 5.55%, 3-year 5.45%, 5-year 5.50%. The term pages under Rates show every ranked brand at each.

This site estimates simple interest as the amount, times the annual rate as a decimal, times the fraction of a year. A $10,000 deposit at 5.60%, the highest comparable twelve-month rate read on 10 Oct 2026, earns $560.00 over a year; the same annual rate over six months would be $280.00, which illustrates the arithmetic rather than quoting a six-month rate. The calculator shows the interest each ranked brand’s rate would pay on your amount over each term.

A higher rate for a shorter term can beat a lower rate for a longer one in dollars per year, but only if the money can be reinvested at a similar rate when it matures, and future rates are not known in advance.

A ladder divides the money among several deposits with different maturity dates. As each matures the money can be spent or reinvested at the rates then on offer, so reinvestment is spread over time rather than done on one day, and a maturity date comes around at intervals. All of the deposits are still locked at the start, and a need for money between maturities still means a break. How the spacing continues depends on the terms chosen at each renewal.

Deposits at separately licensed ADIs each sit under their own guarantee limit, counting everything the same holder has at each institution, and each maturity can be compared across the market rather than renewed at one bank’s offer.

A term that ends when the money is needed avoids an early break, allowing for the time a withdrawal takes to arrive. With no fixed date, a ladder and a single long deposit trade off differently: the ladder spreads access and reinvestment, the single deposit fixes one rate for the whole amount.