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4 reasons to consider a fixed-term deposit -14 Format
Saving and Investing 27 September 2023

4 reasons to consider a fixed-term deposit

Alternative strategies to preserve and grow your wealth can sometimes be viewed as risky. That certainly can be the case if you adopt a more aggressive approach in your portfolio planning, although this is seldom the right approach for your everyday investor.

When you open an International bank account, you’re also opening the door to a host of international products previously not available to you. Simple solutions from savings and investments or buy-to-let property financing to complex legacy planning offering you unprecedented flexibility to execute your financial  strategy.

When it comes to managing your international finances, there is no one-size-fits-all solution. Your circumstances, goals and ambitions are distinctively yours, so the scope of services you require will be just as unique.

Take, for instance, the international fixed-term deposits offered by Standard Bank. These accounts hold a few advantages over other savings products we offer, but that’s not to say they’re right for everyone.

A fixed-term deposit could be right for you if you have surplus capital that you don’t need at short notice. If this is you, then here are four other reasons to consider aixed-term deposit account.


  1. Greater visibility allows you to plan

If you have surplus capital to put away, one of your first questions will be the expected returns. This is especially apt when inflation is high because the future value of  capital will be worth less if returns don’t beat inflation.

With a fixed-term deposit, you know at the time of committing your capital how much you’ll earn over a defined term.

Rates offered on the Standard Bank International Fixed Term Deposit vary according tothe deposit term and value. Longer term deposits generally earn a higher rate than shorter term deposits, while higher balances are usually rewarded with higher rates.


  1. Useful diversification tool

You can add more layers of diversification using our accounts, for instance, by making deposits in either Pound Sterling, US Dollar, Euro, Australian Dollar or South African Rand. This range of choice is especially appealing to clients who experience high volatility in their home currency.

Another diversification layer you can explore is to make deposits of differing durations. With 3, 6 and 12-month terms available, you could stagger your deposit terms to suit your future cash needs.


  1. Lock in higher returns

One of the unintended consequences of a higher interest rate environment is that the rate you receive on fixed-term deposits has also risen. This is a marked turnaround from the long period of low interest rates that followed the 2008 financial crisis when savers earned little to no interest.

Historical trends and current data show that inflation will fall again, and with it so will interest rates. So, you could use longer-dated fixed term deposits now to lock in the currently higher rates. This allows you to preserve your future buying power if this rate outpaces the declining inflation rate.


  1. Minimal effort required

A fixed-term deposit is ideal if you’re not an active investor or if you don’t feel the need to constantly tinker with your portfolio. Once you make your deposit your capital is tied up for the term that you’ve chosen.

It’s difficult to imagine a simpler way to preserve your capital than making your deposit for your chosen term and then waiting out the term. And, you have the added comfort of knowing what the outcome is going to be by the end of the period.

A fixed-term deposit is probably not right for you if:

  • You might need immediate access to your capital
  • You don’t have the lump sum available to meet the minimum deposit threshold

The certainty* offered by the fixed-term deposit is very comforting at a time when markets have been extremely volatile and erratic. And don’t forget the opportunity of getting higher rates now on capital that will mature in what could be a lower-inflation future.

Read more about our international fixed-term deposits, or view our full range of international savings products.