Term deposits 'offer attractive returns'

Term deposits may be a worthy investment option at present given the mixed outlook for super accounts, it has been suggested.

John Collett, a finance columnist for the Age, noted that Aussies who compare term deposits can currently find returns of more than seven per cent on three-year offerings.

"The recovery in super accounts since March last year has faltered, with a loss of almost one per cent in April and a further four per cent in May," he observed, adding that the reaction of many investors to such trends may be to put all their money into a cash deposit "until the storms blow over".

However, Mr Collett also argued that despite the strong interest rates being offered on term deposits at present, Australians should also not ignore the benefits of having a diversified investment portfolio.

He claimed this still offers a stable means of generating wealth over the long term.

Last week, a study by the Melbourne Institute revealed that female members of the baby boomer generation will on average only have two years’ worth of savings to live on when they reach retirement age.

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