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SERVICES · DEFINED TERMS. CLEAR STRUCTURE.

Fixed Term Investments

Fixed term investments involve committing capital for an agreed period under stated terms. FPW presents information on these opportunities clearly, so investors can understand the term, the structure, how returns are determined and the risks involved.

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01 / DEFINITION

What is a fixed
term investment?

A fixed term investment is one where capital is committed for an agreed period under stated terms. The investor knows the intended duration, how returns are designed to be calculated and paid, and what happens at maturity.

Fixed term investments take many forms, from bank term deposits to notes, private credit funds and mortgage funds offered by non-bank issuers. These can differ significantly in risk, security and regulation, even where the headline structure looks similar.

02 / MECHANICS

How fixed term
investments work.

01

1. Review the offer

Understand the issuer, the underlying assets, the return structure, fees and conditions set out in the offer documents.

02

2. Commit capital

Funds are invested for the agreed term, subject to any minimum investment and eligibility requirements.

03

3. Receive returns

Interest or distributions may be paid periodically or at maturity, according to the terms and subject to the issuer meeting its obligations.

04

4. Maturity

At the end of the term, capital is due to be repaid or may roll over into a new term, depending on the instructions and terms.

03 / DURATION

Investment
terms.

Terms can range from a few months to several years. Shorter terms return capital sooner and allow more frequent reassessment; longer terms commit capital for longer and may be structured with different return profiles.

Choosing a term is a planning decision. It is worth aligning maturities with when funds are likely to be needed, and some investors stagger maturities across several terms so that capital becomes available at regular intervals.

04 / RETURNS

Income and
returns.

Returns are commonly expressed as an interest rate or target return per annum. They may be fixed for the full term or variable, and may be paid monthly, quarterly, annually or at maturity.

A stated or target rate is not a guaranteed outcome. Returns depend on the issuer's ability to meet its obligations and, in many cases, on the performance of the underlying assets. Investors should check whether rates are quoted before or after fees.

05 / ACCESS TO FUNDS

Liquidity.

Funds in a fixed term investment are generally committed for the specified period. Some products allow early withdrawal with a reduced return or fee; some permit redemption only at the issuer's discretion; others do not allow withdrawal before maturity at all.

Before investing, understand the withdrawal conditions in full and consider keeping sufficient accessible funds for foreseeable needs.

Understanding liquidity

06 / RISK

Risk
considerations.

01

Credit risk

The issuer or underlying borrowers may be unable to pay interest or repay capital.

02

Liquidity risk

Capital may not be accessible before maturity, or only on unfavourable terms.

03

Interest rate risk

Market rates may rise above the fixed rate during the term.

04

Inflation risk

Higher-than-expected inflation can erode the real value of returns.

05

Security and ranking

Where an investment is secured, the quality of the security and the investor's ranking matter.

06

Concentration risk

Exposure to a single issuer, borrower or sector increases the impact of any one default.

07 / SUITABILITY

Who may consider
fixed term investments?

Fixed term investments are not suitable for everyone. Investors who may consider them often share certain characteristics: a preference for defined terms and a stated return structure, an interest in income, and funds that will not be needed for the duration of the term.

Investors who may need unexpected access to their capital, or who are uncomfortable with credit risk, should consider these investments carefully.

08 / CHECKLIST

Questions investors
should ask.

  • Who is the issuer, and how is the investment regulated?
  • What are the underlying assets, and how are they valued?
  • How is the return calculated, and is it before or after fees?
  • When and how are returns paid?
  • Is the investment secured, and where do investors rank?
  • What happens at maturity — repayment or automatic rollover?
  • What are the conditions and costs of early withdrawal?
  • What reporting will investors receive during the term?
Wealth Management Fixed term investments explained

AT A GLANCE

01

Set investment terms

Opportunities with a stated duration, from shorter commitments to multi-year terms.

02

Income focus

Structures that may offer regular distributions or interest, subject to the terms of each offer.

03

Clear documentation

Key terms, underlying assets and conditions presented in a straightforward format.

04

Liquidity awareness

Understanding that capital may not be accessible before the end of the term.

FREQUENTLY ASKED QUESTIONS

Fixed Term Investments
questions.

Are fixed term investments guaranteed?

Not necessarily. Returns and repayment of capital depend on the issuer and the underlying assets. Only certain deposits with authorised deposit-taking institutions are covered by the Australian Government's Financial Claims Scheme, subject to its limits and conditions.

Can I withdraw my money early?

It depends on the terms of the specific investment. Some allow early withdrawal with a reduced return or fee, some only at the issuer's discretion, and some not at all. Always check the withdrawal conditions before investing.

How are returns paid?

Returns may be paid monthly, quarterly, annually or at maturity, or reinvested, depending on the terms of the offer.

What is the difference between a term deposit and other fixed term investments?

A term deposit is offered by a bank or other authorised deposit-taking institution. Other fixed term investments, such as notes or private credit funds, are offered by non-bank issuers and can carry different risks and protections.

What happens when the term ends?

Capital is generally due to be repaid at maturity, or it may roll over into a new term if that is the default arrangement or your instruction. Check the maturity process in the offer documents.

Are fixed term returns affected by interest rates?

A fixed rate stays the same for the term, which means you do not benefit if market rates rise. Variable-rate structures move with a benchmark, so returns can fall as well as rise.

Is a higher rate always better?

Not necessarily. A higher rate can reflect higher credit risk, lower security or longer terms. The rate should be considered alongside the issuer, the underlying assets and the conditions of the investment.

FURTHER READING

From FPW
Insights.

ImportantInformation on this website is general in nature and does not take into account your objectives, financial situation or needs. Investments carry risk, including the possible loss of capital. Past performance is not a reliable indicator of future performance. Consider seeking independent professional advice before making an investment decision. Key considerations: Returns are not guaranteed; Early withdrawal may be restricted; Review the offer documents in full.

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