Term deposits 'should be split up'

Monday 20 June 2011

Article by Mozo

Aussie investors should put cash into a number of different term deposits that mature at a variety of times, it has been suggested.

Numerous term deposit accounts 'a good option'

Jonathan Philpot, wealth management partner at HLB Mann Judd, told National Features it is not advisable to put all funds into a single long-term deposit.

"Often a good strategy with term deposit investments is to break them up and spread the maturity over a number of years," he suggested. .

He noted that this may be a particularly savvy move in the current economic climate as rates are expected to increase within the next 12 months.

At the moment, investors who compare term deposits may expect to benefit from interest rates of about six per cent.

The cash rate set by the Reserve Bank of Australia is 4.75 per cent – the level set in November last year – but this is expected to increase in the coming months.

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