Bank deposits at record high as investors fear shaky markets
Bank deposits and mutual funds are now holding record amounts of cash as investors look to hoard their wealth rather than invest it in the risky global share market, new research shows.
Figures compiled for the Australian by Macquarie Capital Securities reveal that the country’s four major banks now hold total deposits from businesses, households, governments and other banks of $938.4 billion, up 11.9 per cent on a year ago.
The data suggests that more people and organisations are inclined to compare term deposits in search of the best returns, particularly as confidence in the world’s volatile markets remains low.
"There are a lot of people sitting on the sidelines," said Brian Redican, a senior economist at Macquarie. "That’s driven by the fact that investors are still cautious, they don’t have the confidence so they are sitting out of the market."
According to the Australian, the national share market was 36 per cent below its peak of 6828 on November 1, 2007 at the weekend.
Meanwhile, in a recent interview with News Limited, Tony Meredith, Suncorp’s executive manager for deposits, argued that term deposits are particularly suited to people who are saving for a goal and want to make their money work harder for them.
This article is brought to you by Mozo – Helping you compare term deposits