Love rate rises?

Tuesday 13 April 2010

Article by Mozo

With rates on the rise, the world of deposits is becoming a much more interesting place.

Term deposits are back in vogue, with some really strong offers from RaboPlus aggressively leading the market. Similarly, savings accounts have enjoyed a hot period of competition making them a very attractive prospect for keen rate chasers.

So if you’re one of the lucky few who has a chunk of money saved up, it’s time get it into a term deposit or savings account. Now!

But which one?

There are two questions you need to consider: how long do you want to invest your money for, and do you need access to it?

If it’s short-term investment (under 6 months), a savings account is your best bet because most savings accounts have high introductory bonus rates – like the <#ING Direct Savings Maximiser#SavingsAccount#38#> 5.85% p.a. Any longer than that, go for a term deposit because rates will be better - like the <#RaboPlus Term Deposit#TermDeposit#12#> 6.56% for 1 year p.a. or 7.40% p.a. for 5 years

If you need access to your money, go with a savings account, unless you want to be stung by big fees on your TD. Basically you trade flexibility for a better interest rate.

Choose a Term Deposit because:

• Your money is locked away. Want a new TV? Well you can’t have it. Yet.
• Interest rates are high, and get higher the longer you lock your money away.
• You choose the term: from 30 days to 5 years, the choice is yours!
• Top Picks: <#RaboPlus Term Deposit#TermDeposit#12#>. <#NAB Long-Term Deposit#TermDeposit#119#>

Choose a Savings Account because:

• You have access to your money, very easy to set up online
• If interest rates go up – like they did last week – account rates should go up (eventually)
• Very strong introductory rates (almost 6% at the moment)
• Top Picks: <#ING Direct Savings Maximiser#SavingsAccount#38#>, <#Citibank Online Saver#SavingsAccount#136#>

Compare Savings Accounts or compare Term Deposits and make your money work for you.