Investors 'should consider longer term deposits'

Term deposits that tie up funds for between one year and three may be sensible options for some investors, an expert has stated.

Steven Wright, director of fixed-interest with RBS Morgans, suggested the outlook for interest rates during 2011 is likely to be relatively stable, reports

However, he added that the eight per cent five-year term deposits available last year are unlikely to appear again any time soon.

Despite this, the expert stated: "There's an argument for investors locking in some of their money on longer term deposits – over one to three years – with rates of 6.5 per cent or better."

He added that if those who compare term deposits can find a floating rate that is slightly higher than this then it would be "even better".

One of the most competitive term deposit rates on the market at the moment is offered by RaboDirect, which enables investors to get 7.05 per cent on a five-year account.

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