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6 things to consider when your term deposit matures


Options for my investment

You have a number of options to consider when your term deposit matures.

Your financial institution will usually notify you about two weeks before your term deposit ends. This notification will contain the details of your term deposit. In many cases, the notification letter will include a reply slip you can use to communicate your instructions regarding the investment.

1. Review the economic outlook

It can be useful to assess the outlook for the economy and inflation when deciding on what to do next with your term deposit. Understanding economic and inflationary risks can help you decide what kind of return you want and how long you want to tie up your money for.

Term deposits typically range from one month to five years. Usually, the longer the time to maturity, the higher the interest rate.

2. Invest in another term deposit

You can roll over the initial investment amount and the earned interest into another term deposit.

Look at the range of interest rates across the terms available for investment. Ask yourself if you will need to access your money before the end of the term you’re considering.

3. Receive the interest and roll over your initial investment amount

You can roll over the amount initially invested into another term deposit and have the interest paid into your nominated bank account. This can be an option if you want to use the interest earned for other purposes but want to keep earning interest on the initial investment.

It can be useful to review the interest rate on the term in the days leading up to the maturity.

4. Decide to increase or reduce your investment

You can increase or reduce the size of your investment when it rolls over into another term deposit.

If you have extra money to invest, or need to access part of your money, this is an option you may want to consider. As part of your analysis, it can be helpful to reflect on your personal circumstances and your investment goals.

5. Select a nominated account for your investment

When applying for a term deposit, you will need to nominate a bank account to be linked to your term deposit. For example, you can have your Macquarie Bank Term Deposit linked to your Macquarie Cash Management Account. This will allow you to have visibility over both accounts in the same place.

6. Choose an automatic rollover simply by taking no action

If you decide to take no action when your term deposit expires, it will automatically roll over for the same term at the interest rate of the day. Some institutions offer a grace period of several business days, allowing you to make changes to your term deposit or withdraw funds without incurring a cost.

It can be useful to review the interest rate on the term in the days leading up to the maturity to assess whether you’re happy with the interest rate on offer. Providers usually set term deposit rates each morning.

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