We often speak with clients and landlords who are saving for their next investment, putting a little extra away in their savings account each week or month, waiting until they have enough funds.

If this is you or a family member have you considered locking your money away in a term deposit to get a better interest rate?

A term deposit can be a great way to remove the temptation if you think the lure of a holiday or shiny new car might be too much to resist.

Like all investing it is important to do your research and shop around when finding a term deposit that’s right for you.

While the interest rate is definitely one of the most important features of a term deposit, it should always be considered in conjunction with the following points:

Fees & charges: Check if the bank or financial institution charges any annual, set up or other ongoing fees.

Interest payments: Make sure you know when your interest will be paid, e.g. at the end of the loan term, annually or at regular intervals throughout.

Term maturity: Find out what happens when the term deposit matures (ends). Does it roll over into another term that you’re locked into if you don’t withdraw your money? Will that interest rate be as high as your initial interest rate?

Break costs: If you break your term deposit early, you may be penalised so make sure you don’t select a term that’s longer than you’ll want.

We always recommend that you seek professional financial advice before investing.

It is great to set new property goals, but don’t forget you could have enough equity in your current investment to fund your next one with no cash outlay.