Term Deposits vs Managed Investment Schemes: What’s The Difference?
As economic conditions shift and investors seek dependable income, term deposits continue to appeal for their simplicity and capital security. But they’re just one of several options available to those looking to preserve capital and earn consistent returns.
Managed investment schemes, such as income funds, are increasingly part of the conversation for investors who value monthly income distributions and access to professionally managed portfolios.
While both term deposits and managed investment scheme structures can support income or capital preservation goals, they differ significantly in structure, risk, and flexibility.
Whether you’re focused on income, diversification, or capital stability, understanding how term deposits compare to managed investment schemes can help you make a more informed decision.
Here’s a closer look at how they compare.
What is a Term Deposit?
A term deposit is a fixed investment with a bank or authorised deposit-taking institution (ADI), where your money is locked away for a set term in exchange for a guaranteed interest rate. These investments are generally considered very low risk.
Key Features of Term Deposits:
- Fixed interest rate over a set period (e.g. 6 or 12 months)
- Interest is usually paid at maturity or annually
- Government-backed protection up to $250,000 per institution per investor
- Early withdrawals may incur penalties or reduce interest earned
Term deposits are often favoured by conservative investors seeking capital protection and certainty of returns.
What is a Managed Investment Scheme?
A managed investment scheme pools money from multiple investors, which is then managed by a professional fund manager in accordance with the fund’s strategy. Skyring’s income funds are registered managed investment schemes that aim to generate monthly income for investors while preserving capital.
Key features of managed investment schemes:
- Professionally managed portfolio of underlying investments (such as secured loans and other assets)
- Income distributions may be paid monthly, quarterly or annually (depending on the fund)
- Greater liquidity flexibility in terms and access (depending on fund conditions)
- Returns are variable, are not guaranteed and capital is at risk
- Investments in the fund are not bank deposits
- Investors can view reports and manage transactions via a secure online investor portal.
How do they Compare?
| Feature | Term Deposit | Managed Investment Scheme (e.g. Skyring’s Funds) |
| Income frequency | Usually at maturity or periodically | Typically offers monthly distributions, aiming for steady income |
| Capital Security | Generally guaranteed by the bank (up to $250,000 per institution under the Australian Government Guarantee Scheme). | Capital is at risk. Not guaranteed. Secured by first mortgages and managed via conservative lending practices. |
| Liquidity | Locked for fixed term. Early access may incur withdrawal penalties. | Aims to make quarterly withdrawal offers, subject to minimum investment terms and liquidity conditions. More flexible access depending on the fund’s structure. |
| Risk profile | Very low | Varies by fund; generally low to moderate |
| Return potential | Fixed and pre-agreed. | Variable and not guaranteed. Skyring Fixed Income Fund – indicative distribution rates currently around 6.55% p.a.^ Skyring Platinum Fixed Income Fund – indicative distribution rate currently up to 8.25% p.a.^ |
| Management | No active management required. | Active, professionally managed by an investment team with oversight and reporting. |
| Access | Available through most banks. Simple application process. | Easy application process via fund manager. Investors gain access to secured notes or a pooled loan strategy. |
^Indicative distribution rate as at 1 August 2025. Rates are subject to change and not guaranteed.
Which Option is Right for You?
Term deposits may be suitable for investors seeking a simple, predictable outcome with capital protection under the government guarantee.
Managed investment schemes, such as the Skyring Fixed Income Fund or Skyring Platinum Fixed Income Fund, may better suit investors who are seeking regular income, professional management and access to a broader range of investment opportunities. These investors understand that capital is at risk but appreciate the potential for higher returns and more flexible access to their investments.
Every investment choice comes with trade-offs. Understanding the differences between these options can help you make an informed decision that aligns with your goals, time horizon, and risk appetite.
With a new financial year underway, this is an ideal time to review your financial goals. If you are considering investment options that provide regular income and prioritise capital stability, we encourage you to speak with your financial adviser or consider what is appropriate for your circumstances.
Learn More About Skyring’s Income Solutions
At Skyring, we specialise in income-focused funds with a clear emphasis on capital preservation, transparency, and consistent monthly income. If you’re exploring income options beyond traditional term deposits, our funds offer a professional, flexible alternative that can complement your portfolio.
To learn more about Skyring or our Funds, contact us on 1300 73 72 74
or click here to request an information pack today.
Important Information:
This blog post is for general information only and does not consider your personal circumstances, financial needs, or objectives. You should read the Product Disclosure Statement carefully before investing. Past performance is not a reliable indicator of future results. Investments carry risks including possible loss of capital. No guarantee is made regarding the repayment of capital or the payment of income.
As with all investments, returns are subject to market conditions and the performance of the underlying assets.
The figures in this blog are for illustrative purposes only and based on indicative distribution rates. Actual returns may vary.
Past performance is not a reliable indicator of future performance. The rates of return from the Fund are not guaranteed. An investment in the Fund is not a bank deposit and is subject to investment risk, including the loss of capital invested.
This rate of return is subject to the performance of our related entity, Skyring Capital Pty Ltd and/or Skyring Securities Pty Ltd.
You should consider whether the investments are suitable for you or seek personal advice from a licensed financial planner before making an investment decision.
To invest in this Offer, investors should obtain and read the PDS and TMD before making an investment decision.
TMD and PDS for this product are available from our website or request a copy by contacting us on 1300 73 72 74 or request one from your Financial Advisor. Investments may only be made by completing the application form attached to the Product Disclosure Statement or via our online application service.
Skyring Asset Management Limited ACN 156 533 041 holds Australian Financial Services License (AFSL) 422902. Skyring has registered the Skyring Fixed Income Fund ARSN 622 775 464 with the Australian Securities and Investments Commission (ASIC). Skyring Asset Management Limited ACN 156 533 041 AFSL 422902 is the issuer and manager of the Skyring Fixed Income Fund ARSN 622 775 464. Skyring has registered the Skyring Platinum Fixed Income Fund ARSN 646 317 982 with the Australian Securities and Investments Commission (ASIC). Skyring Asset Management Limited ACN 156 533 041 AFSL 422902 is the issuer and manager of the Skyring Platinum Fixed Income Fund ARSN 646 317 982.
Withdrawal rights are subject to liquidity and may be delayed or suspended. See PDS for more information.
Skyring’s address is Level 2, 2 Gardner Close, Milton, QLD, 4064. Our reply-paid postal address is Reply Paid 88076, Kenmore, QLD 4069. You can contact us by telephone on 1300 73 72 74 or via email at investor@skyring.com.au.
