Term deposits 'trumped shares in 2008'
In private investment history, 2008 will go down as the year that cash became king, one commentator has surmised.
Investor Daily’s resident investment expert Vishal Teckchandani has explained that as banks around the world faltered and fell in the latter part of 2008, traders moved quickly to plough their money into term deposits to avoid the worst of the losses.
"Cash has unexpectedly become one of the most sought after and admired asset classes amid the global financial crisis," he has claimed, adding that this is equally true of big businesses and small households, with both working hard to store up as much cash as they can.
And as people frantically began to compare term deposits, the competition to attract savers intensified, Teckchandani recalled.
But with the faith in many banks crumbling, Kevin Rudd was forced to step in and introduce bank term deposits to level the playing field for smaller institutions and provide much-needed security for depositors.
The guarantee was announced by the Rudd government on October 12th.
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