Six-month deposits 'the safest option'
In the financial firestorm of recent months and the rate chopping bonanza that followed, savers are faced with some tough options when deciding where to park their cash.
Such is the claim of the Sydney Morning Herald, which has pointed out that while Aussies put more than $100 billion into term deposits last year, when returns reached eight per cent in 2009 they are going to get a lot less out of their money.
As rate cuts bring term deposits to around four per cent, consumers are going to have to think hard about where to put their money, with online high interest savings accounts identified as one lucrative alternative.
Meanwhile, FIIG Securities broker Jim Stening told the paper that most of his clients are going for six-month term deposits.
“People are not ready to put their funds at risk again. I would say most people are rolling over to a new term when their term deposits mature,” he commented.
At its last meeting in December, the Reserve Board sliced a full one per cent off the base rate, a move which was welcomed by first home buyers around the country but one that could shrink savings returns further.