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The biggest advantage of the term deposit savings account is that if interest rates plummet on all other products, your term deposit interest rates don't because they are fixed in to the end of the term. The interest can also be compounding interest, so you are virtually making money by being paid interest on your interest.

Another advantage of term deposits are that the money is locked away for the time you specify, so you are less likely to fritter it away on non-essentials. It's amazing what we can get by without, but unless there is that penalty of the early withdrawal clause, we might well believe we simply can't do without that treat at all. All it takes is a bit of forced discipline which is what that the term deposit gives.

Having a term deposit account actually teaches us to save our money for a rainy day. It certainly feels good to be able to see that we have savings put by. It helps us to feel secure about the future when we know we have a guaranteed rate of return for the duration of the term. No one likes to risk losing their hard-earned money, so the low risk of a term deposit is another advantage.

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Read more about bank term deposit accounts and fixed term deposit rates at the Macquarie Private Wealth website (www.macquarieprivatewealth.com.au).