How Bank Australia’s new Impact Term Deposit works – and where your money goes

Key takeaways

• Term deposits pay a fixed, guaranteed interest rate for a set period, typically higher than an everyday savings account.

• Bank Australia’s Impact Term Deposit supports lending across specific environmental and social impact areas.

• Help fund targeted impact for people and the planet, while growing your savings.

• Open with a minimum $500 deposit for a fixed 6-month term, with no account fees.

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When you put your savings in the bank, they don't just sit there.  

Banks use these deposits to lend and invest, so no matter where you bank, your money is already shaping the world.

The question is: what’s your bank doing with your money?

Being customer owned means we can balance profit and purpose, and don’t have to deliver financial profits to external shareholders as our top priority. This means all banking with Bank Australia – including our standard term deposits – can be underpinned by our responsible banking policy, which rules out lending to industries like fossil fuels, weapons or tobacco.

Now, following a successful customer product pilot in 2023, we’re offering a new option for our customers: our Impact Term Deposit is a six-month, fixed-term savings account where your deposit supports lending for targeted positive impact like green homes, affordable housing and protecting nature.  

“Our customers bank with us because they want their money to be a force for good,” says Jane Kern, Bank Australia’s Head of Impact Management. “The Impact Term Deposit lets customers use their savings to help fund targeted positive impact for people and the planet.”

What is a term deposit?

A term deposit is a savings account that pays a fixed, guaranteed interest rate for a set period. You deposit a fixed amount for a set period – often 3, 6 or 12 months – and, in return, receive a fixed interest rate for that term.

Because the funds are committed, banks can plan investments and long-term lending with more certainty. This is why term deposits are typically incentivised by offering higher interest rates than general savings accounts.

It’s important to note that if you withdraw some or all of your money from a term deposit before the term ends, an early withdrawal interest penalty may apply. There is often also a notice period required for a withdrawal, for example 30 days for Bank Australia term deposits.

For customers who don’t need immediate access to their funds (or find this helpful for saving) and who like to predict returns, a term deposit can be a practical choice.

What makes Bank Australia’s Impact Term Deposit different?

Thanks to our responsible banking policy, when you’re a Bank Australia customer you can know your money isn’t funding industries like fossil fuels, weapons and tobacco.  

But the Impact Term Deposit goes a step further.  

The funds in your Impact Term Deposit will support lending across specific environmental and social impact areas.  

The Impact Term Deposit has been certified¹ by the Responsible Investment Association Australasia (RIAA). This means RIAA has reviewed the Impact Term Deposit’s processes to check that they meet RIAA’s responsible investment standards.

What will your Impact Term Deposit help fund?

Funds will finance or refinance lending across social and environmental asset categories that contribute to positive outcomes for people and the planet, and may support projects like:  

• building or upgrading green and energy-efficient homes  

• improving supply and access to affordable and accessible housing  

• land conservation and restoration  

• charities and not-for-profits  

Our Sustainability Funding Framework governs how funds invested in the Impact Term Deposit are used to fund projects, how we define and measure the positive outcomes associated with those projects, and how we report and communicate those outcomes to investors.  

Are term deposits safe?

Term deposits can be one of the lower-risk savings options available, depending on your personal circumstances.  

Because your rate is fixed at the time you open the account, you know what interest you'll receive at the end of the term (as long as you don’t withdraw your funds before the term ends).

Like all deposits with Bank Australia, the Impact Term Deposit is covered by the Australian Government's Financial Claims Scheme (FCS), which protects deposits up to a total of $250,000 per account holder per authorised deposit-taking institution. This means the FCS limit of $250,000 applies to the sum of an account holder's deposits under the one banking license.

A risk to be aware of when considering a term deposit is liquidity: your funds are committed for the full term, and early withdrawal may incur a penalty.  

If you think you might need access to your money before the term ends, it's worth considering whether a term deposit is the right fit.

If you're keen to learn whether a term deposit is right for your situation, speaking with a licensed and ASIC-registered financial adviser is a good next step.

What interest rate does the Impact Term Deposit pay?

The Impact Term Deposit offers a fixed interest rate for the full 6-month term, at the time you open the account. This means you know exactly what interest payment you’ll be eligible to receive at the end of the 6 months.

See the current interest rate for Impact Term Deposit.

The minimum deposit is $500 and there are no account fees.

• $500 minimum deposit

• 6-month fixed term

• $0 account fees

• Government guaranteed (up to $250k)

• Certified by the Responsible Investment Association Australasia

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Who is Bank Australia?

We’re Australia’s first customer-owned bank, and a certified B Corp – meeting independently verified standards for social and environmental performance, accountability and transparency.  

We serve about 300,000 customers across the country, and each of them has one equal share and a vote at our AGM. Together with our customers, we focus on four key impact areas of climate action, nature and biodiversity, First Nations Recognition and Respect and affordable and accessible housing.  

Ready to use your savings as a force for good? Open an Impact Term Deposit with as little as $500 for a fixed 6-month term with no account fees.

Open Now →

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