Term deposits 'can be used to manage pension payments'

Older Australians who are thinking about their pensions might consider using term deposits to help them manage their funds.

Michael Hutton, financial advisor at HLB Mann Judd, told the Sydney Morning Herald that Aussies might benefit from having a year's worth of pension payments in a term deposit.

"This means that the next five or six years' pension payments are assured, regardless of what dividends, distributions and tax refunds come in," he observed.

The expert explained that funds in the account will also mature during the time they are left there, which is another advantage of saving funds in this way.

Indeed, Mr Hutton advised people to have a range of term deposits that mature over the next one to five years.

Last month, Orange Credit Union's general manager Paul McNamara told the Central Western Daily that the winner of a recent $2 million Lotto jackpot would benefit from investing his windfall in term deposits.

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