Interest Rates….the Whys and Wherefores

“An investment in knowledge pays the best interest.”
Benjamin Franklin



Banks offer different interest rates to attract funds they can lend out and satisfy the bank regulator, the Australian Prudential Regulation Authority (APRA) that they are stable.

The lowest rates are paid on everyday transaction accounts as money is continually coming and going and the bank can’t rely on having it available.

It’s a different situation for investment-style accounts such as Term Deposits. Investors like Term Deposits as they are secure. In addition, the term and return are known beforehand and banks offer them for these reasons. They have the security of knowing they have the funds for a set period of time and exactly how much interest will be payable and when.

These deposits also enable the bank to satisfy the demands of their regulator (APRA), proving that they have enough liquidity, or funds available, if called on.

At times a bank will offer a higher rate for a particular term to attract this type of investment. Nimble investors who watch rate movements can search and compare to take advantage of these offers –  knowing that when the deposit matures they can withdraw their money or find another term to reinvest. It’s a valuable strategy that enables savers to get the best returns on their cash in these low-rate times.

Banks know there is a pool of people doing this so when they want to raise funds quickly they can make a special offer knowing there will be a quick response.

The simplicity of Term Deposits works for banks as well as savers. It ensures that Term Deposit rates remain competitive with other savings products. It also encourages banks to continue to offer a wide range of terms and interest rates to attract investors.

Cashwerkz offers investors current market rates from a range of term deposit providers, providing the opportunity to select and manage their cash investing, all on a single online platform.  Register now at



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