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How to Find the Best Business Term Deposit Rates

DNBC Team DNBC Team

Jun 20, 2023

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Business term deposits allow companies to deposit funds for a fixed period at a competitive interest rate. The longer your money remains deposited, the higher the returns. If you want your business to benefit from high-yield term deposits, it's key to shop around at different banks and compare options. By assessing term lengths, interest rates, additional fees, and fine print, you can find a business term deposit that maximizes returns.

Why Use Business Term Deposits?

There are several benefits to placing your business funds in a term deposit:

  • Earn interest. The main reason to use term deposits is that your money can earn higher returns than a standard savings account. Business term deposit rates are usually quite competitive.
  • Secure your money. Business term deposits protect your funds by locking in your money for the selected term period. Your original deposit is guaranteed. 
  • Plan ahead. By choosing between different terms like 6 months to 5 years, you can pick an option that suits your financial plans. Longer terms typically mean higher returns.
  • Flexible options. Some term deposits provide additional flexibility with options to withdraw funds early or add funds during the term. Check the conditions to ensure the option is right for your needs. 

How to Find the Best Business Term Deposit Rates

How to Find the Best Business Term Deposit Rates

How to Get the Best Term Deposit Rates 

Once you've decided to place funds in a business term deposit, follow these steps to find the best possible rates:

1. Check major business banks. Major banks like Chase, Citibank, and Bank of America frequently offer special business term deposit promotions and competitive rates to win new customers. See what kinds of rates they are currently paying for different terms.

2. Compare mid-size banks. Don't ignore regional mid-size banks. To compete with big banks, they often provide very attractive term deposit rates and additional benefits for business customers. Do some searching to identify banks in your area and check their offers.

3. Look at online banks. Online-only banks typically have lower overheads so they can usually pay higher interest rates. Institutions like CIT Bank, UFB Direct, and Capital One Spark Business provide term deposit options over the Internet with no branch locations. Their rates are often very competitive.

4. Pay attention to rates and terms. Term deposit rates vary over time based on current interest rates. Longer terms like 2-5 years generally have the highest rates. Make sure any rate you consider is higher than current high-yield savings account rates. Also, check if the bank compound interest daily to maximize returns.

5. Consider fees and conditions. Don't assess rates alone. Also consider any fees for non-standard transactions and conditions for withdrawing early. Some term deposits charge high penalties. Ensure you understand any conditions that could impact your business plans before depositing funds.

6. Negotiate the best deal. Once you find some attractive rates, negotiate with the institutions to try and obtain an even better rate. Explain that you're comparing various offers. Ask if they can match or beat other rates to win your business term deposit. Especially with mid-size and online banks, there is often room to bargain.

7. Watch rates closely. The terms deposit landscape changes frequently. Keep an eye on the latest rate offers from business banks even after you open an account. If there are significantly higher rates available, you may be able to shift your funds into a new deposit once your current term completes. Staying alert ensures your business continues earning the best returns on your term deposits.

By following these tips, your business can discover the most rewarding business term deposit rates. Taking time to compare different banks, understand their offers fully, and negotiate the best deal will help you make the most of your business funds. Competitive term deposits provide an easy way for your company to gain the highest interest possible on money that's not needed for short-term use.

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Note: The content in this article is for general informative purposes only. You should conduct your own research or ask for specialist advice before making any financial decisions. All information in this article is current as of the date of publication, and DNBC Financial Group reserves the right to modify, add, or remove any information. We don’t provide any express or implied representations, warranties, or guarantees regarding the accuracy, completeness, or currency of the content within this publication.