WHICH TERM DEPOSIT HAS MORE BANG FOR BUCK?

WITH record low interest rates, investors are turning to term deposits to get more bang for their buck according to CANSTAR.

The financial ratings provider assessed 99 term deposits from 76 different financial institutions to compare value for money.

ME Bank came out on top after striking a winning balance between high interest rates and strong features, while CUA took out the customer-owned institution category.

Two cuts to the official cash rate earlier this year, spurred 69 providers to lower interest rates by less than 0.5 per cent in the last six months and 12 providers to cut by more.

CANSTAR research manager Mitchell Watson says there are still some good deals available for savvy investors looking to maximise returns.

"When considering locking your money away, don't automatically assume that a long term means you are getting the best deal," Watson says.

"Naturally the interest rate on offer should be of the utmost importance, but we assess products based on their features, as well as their rates, because sometimes you have to look past the headlines to get the best return on your money.

"The financial institutions will factor in any anticipated changes to the cash rate when they set their rates, but this does emphasise that competition remains strong and savers can find good value if they pay close attention to what's on offer."

CANSTAR's research shows term deposits have produced a higher average return than online savings accounts over the last two years.

Based on a $25,000 investment over 12 months, consumers who parked their cash in a term deposit last June would have earned an average $217 more in interest compared to using an online savings account.