Term deposits 'are still very attractive'

Leaders at RaboDirect believe that term deposits are still proving to be very appealing to Australians.

Speaking to Money Management, investments manager at RaboDirect Australia and New Zealand Tim Hewson said that self-managed super fund trustees are increasingly turning to the packages.

Interest rates attached to the products have remained extremely attractive despite the fact the Reserve Bank of Australia has slashed the national cash rate in recent months.

As a result, many bank customers would have feared that their deposits would have taken a hit, but this has not been the case.

Competition is still very intense between banks and lenders, so many companies have opted not to lower their rates, while some have actually raised them in order to attract new clients.

National Australia Bank recently hiked the rates on its 12-month deposits by 25 points, the Sydney Morning Herald reports.

"Interestingly, we are now seeing younger people turning to term deposits due to the certainty of returns," Mr Hewson was quoted as saying.

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