New Zealanders are a frugal bunch, which is why we know kiwis just like you want to ensure you save enough of the money you make today to ensure you’re making things easier for your future self tomorrow. Maybe you’re planning on spending your well-earned retirement renovating your family home? Travelling New Zealand or the world? Or perhaps you want to consolidate your debts and give your family peace of mind?
No matter what your future savings goals are, a term deposit is an easy way to put your money away and earn high interest. By investing in your future now, you’ll save yourself from having to rely on costly credit cards or loans later in life to support yourself, and ensure you can live your best life at the time you’re best able to live it.
But what is a term deposit, exactly? And how does it work? Keep reading to find out how quickly and easily you could be saving for your future with a term deposit investment.
Unlike other investment options like shares or stocks, a term deposit is a risks-free, no-nonsense way to earn high interest on your savings. With it, you simply select the amount you’d like to save, how long you’d like like to save it for, and then let your money do the rest. Simple!
Compared to other savings accounts, term deposits generally offer a higher rate of interest than even a high interest savings account, though whether a savings account or term deposit is right for you depends on your financial circumstances, your funds, and your savings goals.
A term deposit from a credit union like NZCU Steelsands, for example, provides you with a flexible, competitive interest rate which is calculated daily, with interest paid at regular intervals or on maturity of the term to any account of your choosing.
With it, you receive:
Put simply, a term deposit works much like normal savings account, only the money you put away can’t be added to, withdrawn, or touched until the end of the term that you’ve set. In exchange, you’re able to lock in a much higher interest rate over the life of the term, rather than the variable rate of a regular savings account.
The interest you’ll earn with a term deposit is determined by these factors, taking into account how much you’re investing as well as how long you’re investing for. The more you invest, and the longer you invest it, the higher the interest and the more money you’ll make over the life of your investment.
Typically ranging from one month through to five years, a term deposit could be worth it for you if you’re wanting to remove the temptation that comes with a standard savings account, or if you’d just like to ‘set-and-forget’ your savings and earn a great investment return on your deposit.
Once the term is up, you can either choose to reinvest your original deposit - plus the interest earned - or have it all paid out into an account of your choosing, which makes it easy to increase the amount you’re investing and save even more money.
Do you want to invest in your future with an NZCU Steelsands term deposit? apply online for a term deposit today.