When it comes to money—do you save it or spend it? Saving can feel like a challenge, especially when the amount is small.
It often feels like you’re setting aside part of your spending money with nothing immediate in return. But don’t worry—saving regularly doesn’t have to feel like a sacrifice. In fact, you can grow your money safely without the risks that come with options like the stock market. That’s the beauty of an Illawarra Credit Union term deposit. If you’re considering one, we’ll guide you through how it works and how to make the most of your savings.
What Is a Term Deposit?
A term deposit is a type of savings account that gets locked away with a certain amount of money for a certain period—all with your permission. After which you are guaranteed by the bank an interest rate that is added to your savings. This means that even if you can’t withdraw your money and leave it in the bank, your savings will still grow.
Why Should You Consider a Term Deposit?
A lot of people are risk takers but play safely when it comes to finances. And if you’re this type of person, here’s why a term deposit is a great option:
- Term deposits are not affected by the ups and downs of the economic market; this means that your interest rate is locked in, and you’ll know how much you’ll get when the term is done.
- And if you find it hard to discipline yourself and save on your own, term deposits are an option for you to achieve your savings goal, especially if the goal needs a huge amount for it to be achieved.
How to Choose the Best Term Deposit
The terms of others might not be what you prefer, so to get the most out of yours, consider these factors. Compare interest rates. A small difference can make a big impact, and this is true for interest rates because this determines how much your savings will earn once it finishes the term. Pick the right term length. The length of the term will always depend on when you will be needing your savings, so whichever you choose, your access to your funds will be there when you need them.
Look for special offers. To entice people to give term deposits a chance, some banks offer promotional rates, and these range from short-term gains to long-term support. Before you take it, make sure that it benefits you in the long run.
How to Make the Most of Your Term Deposit
Once you’ve chosen your term deposit, you can still maximise your returns. So here are some strategies on how you can make the most out of it: Reinvest your interest. It’s not bad to cash your savings out, especially if it is meant to be spent on your goals. But if you feel like you still want to save your money, you can reinvest the interest so that your savings grow faster than the first time.
Use a laddering strategy. Laddering is a term used in investment when you put your money into multiple deposits with different maturity rates, so you’ll still have access to your money at intervals you prefer. Take advantage of loyalty bonuses. Banks appreciate it when you renew your term deposit with them, and sometimes they show this through higher interest rates on the renewal to make your stay with them more worthwhile. Match your term deposit to your savings g oals. What do you aspire to achieve? Some may be personal or career growth, but some want to have a steady financial safety net, or maybe a house of their own. Term deposit investments can definitely make that goal come true with added peace of mind.
Make your savings work for you.
It’s true that adulting is hard—not only do you need to provide for yourself in the present, but in the future too. And with enough money to make ends meet, how would you even save in the first place? A time deposit investment might be the solution, as your savings need not be a large amount for you to start on. At the same time, having a structure in the way you save is not a bad thing, especially if the place of storage is safe and you get a reward for not giving into the temptation of spending it.
