The other major advantage is the certainty of a fixed interest rate. If you struggle with the temptation to dip into your savings, perhaps the biggest benefit with a term deposit is that your savings are locked away, so you can’t spend your savings on an impulse purchase. In return, you’ll get a guaranteed rate of interest for the term you select, so you’ll know exactly what the return on your money will be. With a term deposit, you lock away an amount of money for an agreed length of time (the ‘term’) – that means you can’t access the money until the term is up. Here is a brief comparison of the main differences of term deposits and savings accounts. Knowing how both options work could help you understand how each could help you at different stages of the savings journey.
