Best 12-Month Term Deposit Rates in Australia Right Now

If you're shopping for the best 12-month term deposit rate in Australia right now, the short answer is: challenger banks are offering rates the Big 4 haven't come close to matching.

The top rates consistently come from challenger and neo banks that need deposits to fund their lending. Here's who typically leads the pack:

Who Typically Offers the Best 12-Month Rates

The lenders that consistently post the highest 12-month rates in Australia include:

• Judo Bank — one of the most consistently competitive, particularly for savers with larger balances.
• Heartland Bank — a New Zealand-headquartered bank with an Australian licence that competes aggressively on rate.
• MOVE Bank — a credit union that regularly appears near the top of the table.
• Macquarie Bank — competitive rates with a strong digital platform.
• Bank Australia — a customer-owned bank that often matches or beats the Big 4 comfortably.

For today's exact rates, check the RatePulse 12-month rate table, updated daily.

The Big 4 banks — ANZ, CBA, NAB, and Westpac — typically sit 0.30–0.80% below the best challengers for 12-month terms. On a $100,000 deposit, that gap can mean $300–$800 in foregone interest over a year.

Why Challenger Banks Pay More

The Big 4 have enormous retail deposit bases. Millions of Australians leave money sitting in low-rate transaction and savings accounts with ANZ, CBA, NAB, or Westpac — so those banks don't need to compete hard for term deposit funds. Challenger banks like Heartland, Judo, and MOVE Bank have no such cushion. They need to attract deposits to fund their lending, and the only lever they can pull is a better rate.

This structural gap has always existed, but the higher rate environment since 2022 has made it more consequential. When rates are near zero, the difference between 0.05% and 0.10% is immaterial. When rates are above 5%, a 0.85% gap is real money.

What to Look For Beyond the Headline Rate

Payment frequency

Most of the top rates above pay interest at maturity — you receive all of your interest in a single payment when the term ends. Judo Bank and Great Southern Bank pay annually, which means you receive interest partway through. For a 12-month term, the practical difference is minor. If you're parking a large amount and want to receive income sooner, or if the timing matters for your tax return, annual payment is worth considering.

Minimum deposit

None of the lenders in the table above have published minimum deposit requirements for these rates. Judo Bank has historically offered additional rate increments for deposits above $100,000 or $250,000 — if you're investing at that scale, it's worth calling them directly.

Early withdrawal

Every term deposit in Australia carries a penalty for early withdrawal. In most cases, the bank will apply a reduced rate — sometimes well below what was originally offered — to the full deposit period if you break the term early. Before committing, check the lender's terms and ask yourself honestly whether there's any chance you'll need the money before the term ends.

A Note on Heartland Bank

Heartland Bank holds the top spot and it's a name many Australian savers won't recognise. It's a New Zealand-headquartered bank that entered the Australian market and has consistently offered some of the most competitive term deposit rates available. It holds an Australian banking licence, which means deposits up to $250,000 per account holder are covered by the Financial Claims Scheme — the same FCS protection that covers deposits at CBA or ANZ. The unfamiliarity is the point: Heartland has no branch network to fund and competes purely on rate.

Should You Lock In Now?

Term deposit rates move with the RBA cash rate — when the RBA cuts, term deposit rates tend to follow, though not always immediately. Whether rates are heading up or down at any given time depends on inflation, employment, and the RBA's outlook.

If you expect further rate cuts, locking in the current top rate for 12 months means you're protected against that movement for the next year. If you think rates will hold or rise, a shorter term or a savings account might preserve more flexibility. Neither outcome is certain — what is certain is that the difference between staying at a Big 4 bank and shopping around is typically worth 0.30–0.80%, regardless of what the RBA does next.

Use the RatePulse rate table to compare current rates across all term lengths and set a rate alert if you want to know when a specific lender moves.

This is general information only, not financial advice. Term deposit rates change regularly. Verify current rates directly with each institution before investing. The government deposit guarantee applies up to $250,000 per account holder per authorised deposit-taking institution.