Hi,
Just wondering what the consensus is on 3% term deposit for 12 months
is it a good idea?
are rates likely to go up or go down or stay the same over the 12 month period?
cheers
3% Term Deposit for 12 Months
t_c on 31/08/2016 - 14:21
Comments
Interest rates for savings accounts in various other countries are 0% or very close to 0%. Just have a look at these rates for Wells Fargo accounts in USA… https://www.wellsfargo.com/savings-cds/rates/ - 0.01% with a bonus 0.06%!
In the UK it's not much better.
Another RBA rate cut has been tipped for this year (with some analysts saying it will go down to 1%) and I would bet that rates on savings accounts will go down again too.
As for whether a term deposit is a good idea for the OP, it depends on various factors including whether you need your money in the next year or not.
If it's some kind of managed fund promising 3% then there may be a risk you could lose 100%.
ANZ is selling ANZ Capital Notes 4 hybrid paying a dividend at 4.7 per cent to 4.9 per cent margin above the bank bill rate (currently about 2%).
Yeld about 6.7-6.9%
They are not as safe as a term deposit though.
It would be interesting to hear what people think about them.
They will be traded on asx so you can sell them anytime.
I don't think there is much room for rates to decrease too much more. The current savings account rate with uBank is 2.87%. I would just stick my money there and not worry about locking it up for a year.