Earning a higher rate of return on your capital than the interest rates offered by Australian banks is possible however generally involves taking on more risk.

Common alternatives to term deposits deposits which have a different risk profile but similar characteristics (i.e. they are debt-based instruments) include:

Government bonds

Corporate bonds

Promissory notes

Bills of exchange

Managed funds

Private debt

These options are generally offered by non-bank firms and therefore are not covered by the Financial Claims Scheme. They do however offer the opportunity to earn higher rates of return.

Debt instruments such as those listed above are similar in features as they generally involve lending your capital to an organisation for a fixed period of time, in exchange for principal and interest payments.

Our free eBook“7 vital facts every term deposit holder should know before committing funds”talks about alternatives in more detail.

What alternatives are there to term deposits for higher returns?

FREE eBook: 7 vital facts every term deposit holder should know