It's no secret that the current interest rates for both savings accounts and term deposits aren't exactly groundbreaking.

Bank of Melbourne 3 Month Term Deposit The current interest rate for this term deposit product is for a 1 year period and applies to deposit amounts or balances ranging from $250,000 to $5,000,000. Bank of Melbourne term deposits comparison. Compare & review Bank of Melbourne high interest term deposits & features (1, 3, 6, 12 & 24 month term deposits). Just back in 2009, the average big four term deposit rate was 5.25%, when the RBA cash rate was 7.2%. In fact, a few decades ago you could get your hands on a term deposit with an interest rate of 17%.

In 2011, deposit products offered well over 6%pa. Fast-forward to 2019 and it's rare to find a term deposit that returns more than 3%pa on your savings.

However, there are a few that do. Generally, the best rates are for longer terms and for larger deposits; however, there are a few offering above 3%pa on deposits of just $1000.

Here are five of the best term deposit rates in the market today.

So rates aren't what they were in 2011 but term deposits still have their place and they offer a number of benefits to savers and investors, even in this low-rate environment.

Five benefits of term deposits

1. They're low risk

Term deposits are a safe, low-risk way to invest your money. Your deposit, up to $250,000, is covered by the Australian Government guarantee scheme, so if the bank were to go under term deposit holders would be paid back ahead of shareholders.

For investors, term deposits are a great option if you're looking for some low-risk, defensive assets to add to your portfolio.

2. They offer predictable returns

Term deposits offer a fixed interest rate, unlike savings accounts, which have a variable rate that could change at any time.

Bank Of Melbourne Term Deposit Rates Nyc

Because the rate on your term deposit is fixed for the life of the term, if interest rates fall lower your rate will remain unchanged. It also means you can predict the return on your initial deposit down to the dollar, which is helpful for both peace of mind and budgeting.

3. They prevent you from dipping into your savings

Unlike money in a savings account, which you can withdraw whenever you need, term deposits are locked in until they mature.

This is a good option if you find yourself regularly dipping into your savings for impulse purchases.

4. There are no ongoing conditions to meet

Savings accounts often have monthly deposit conditions to earn the bonus interest rate, and if you don't meet the conditions you're often left with little to no interest. Term deposits have no ongoing conditions to meet, making them a great set-and-forget savings strategy.

5. They're flexible

Term deposits aren't a one-size-fits-all product. You can choose one that's locked in for just one month or up to five years.

Bank Of Melbourne Current Term Deposit Rates

You can also choose how you'd like to receive your interest, whether it's monthly, twice a year, annually or in a lump sum at maturity. You can choose whatever suits your financial needs.

Term deposits don't offer the big capital growth that you might experience with some high-risk shares or even property but they do provide a safe and secure place to park your savings while you enjoy guaranteed, risk-free returns.