ASB beating the others this morning and raising 3 year to 5.1% (5year 5% and 1 year 4.6%)
5%
(https://i.imgur.com/Ksgm2Oj.gif)
Yeah I saw that. TSB Bank 5%, across multiple different terms.
Finally, some joy for people who are into term deposits.
Retiree's and others who are coming off 1 year terms they locked in this time last year at 2% will feel better about getting 5% and they would probably feel even better if they knew how much the market overall for both bonds and shares has gone down in the last year.
Despite only paying 2% those who locked in for a year this time last year have enjoyed one of the better performing asset classes despite their purchasing power declining in real inflation adjusted terms.
2022 has sort of been a game of he who loses the least is the winner.
even 5% won't seem much when rates get 10%/15%
So don't lock in for too long
Quote from: Basil on Nov 24, 2022, 12:00 PMYeah I saw that. TSB Bank 5%, across multiple different terms.
Finally, some joy for people who are into term deposits.
Retiree's and others who are coming off 1 year terms they locked in this time last year at 2% will feel better about getting 5% and they would probably feel even better if they knew how much the market overall for both bonds and shares has gone down in the last year.
Despite only paying 2% those who locked in for a year this time last year have enjoyed one of the better performing asset classes despite their purchasing power declining in real inflation adjusted terms.
2022 has sort of been a game of he who loses the least is the winner.
Hmm ...
7% inflation
5% interest reduced by whatever your personal tax rate is.
Not sure I would call that "JOY"?
To understand the joy its helpful if you put yourself into the shoes of an 85 year old retired couple.
These are people that generally play things ultra safe and "Jack and Jill" we'll call them are widely reported to have complained that their nest egg of $500,000 was only earning 1% so they only had $5,000 (less tax) of pocket money to live on, on top of their superannuation. People like them will seldom if ever, dip into their capital because they are "old school" and you don't ever do that so over Covid they cut back and lead a pretty miserable existence on basically superannuation and not much else.
Oh what joy there is to be had when they suddenly find that their nest egg will earn them $25,000 per annum less tax, gosh that's a heck of a lot of meals out with their friends and family and presents for their grandkids! I think its the simple things that bring the most pleasure when you're older, well that's what they tell me...
Jack and Jill have lived for decades in a low inflation environment, and they know that the purchasing power of their income is going down but $25,000 per annum extra is a lot of play money whereas $5.000 is peanuts, its that simple. You have to go back many many years since people like them could get 5% on their money. Try telling them that they're going backwards after tax and inflation, and they'll be too busy out enjoy coffee and meals with their friends and family to care.
I come across people like this in my professional capacity, so I am not making this stuff up. this is how it really is for a lot of older folks and some of them are the nicest people you could ever hope to meet.
https://www.interest.co.nz/personal-finance/118674/term-deposit-rates-have-jumped-week-following-big-ocr-rise-last-week-and
Some pretty good rates now on offer by the banks (compared to recent years) ranging from 5.1% for 9 months through to 5.25% for 5 years.
So, for some sticking cash away for up to 5 years will be tempting, but what happens if the unexpected happens and you need the money urgently? I had no idea, so I looked...seems that, if you go into the managers office begging on hands and knees, they may allow you to withdraw. Punishment seems to generally be a 2% deduction from the rate already paid on the amount being withdrawn.
BNZ
https://www.bnz.co.nz/support/investments/term-deposits/making-an-early-term-deposit-withdrawal#:~:text=Term%20deposits,rate%20adjustment%20of%202%251.
ASB
https://www.asb.co.nz/content/dam/asb/documents/term-investments/2022/asb-term-deposit-early-withdrawal-information-august-2022.pdf
Quote from: kiwi2007 on Jan 22, 2023, 05:56 PMSome pretty good rates now on offer by the banks (compared to recent years) ranging from 5.1% for 9 months through to 5.25% for 5 years.
So, for some sticking cash away for up to 5 years will be tempting, but what happens if the unexpected happens and you need the money urgently? I had no idea, so I looked...seems that, if you go into the managers office begging on hands and knees, they may allow you to withdraw. Punishment seems to generally be a 2% deduction from the rate already paid on the amount being withdrawn.
BNZ
https://www.bnz.co.nz/support/investments/term-deposits/making-an-early-term-deposit-withdrawal#:~:text=Term%20deposits,rate%20adjustment%20of%202%251.
ASB
https://www.asb.co.nz/content/dam/asb/documents/term-investments/2022/asb-term-deposit-early-withdrawal-information-august-2022.pdf
I've known a few people who have broken term deposits on "hardship" grounds and they have never had any real trouble. I guess the banks don't want to appear in the media looking mean and nasty.
The difference these days between bank rates and corporate bonds seems so small I personally find it hard to justify bonds for any savings that I genuinely feel I won't need for 5+ years.
The main banks are a bit slow to adjust their rates; it's been a week since the latest rise. Only a few of the challenger banks have responded.
Heartland have raised theirs today.
https://www.heartland.co.nz/savings-and-deposits/interest-rates
Kiwibank's 90 day notice saver; now at 4.75%. This is a Pie Investment
32 day at 4.05%. This is a Pie Investment.
On call account: 3.85% Pie option available.
Rates definitely getting a move upwards in recent days
https://www.interest.co.nz/saving/term-deposits-1-to-5-years
There hasn't been much movement recently but this morning ANZ, BNZ and Westpac put their short term rates up (up to 18 months) whilst BNZ and Westpac dropped their 4 and 5 year rates.
https://www.interest.co.nz/personal-finance/120771/term-deposit-rate-increases-are-starting-filter-through-although-they-are
Done and dusted – are term deposits at a peak?
https://www.asb.co.nz/content/dam/asb/documents/reports/term-deposits/asb-term-deposit-report-June-2023.pdf?et_rid=NzQyMTM3NjU1NjES1&et_cid=7394776
SBS Bank pushes its one year term deposit rate offer to a 15 year high of 6.5% and well above every other bank. We are moving into an unfamiliar zone where some TD offers are higher than inflation
https://www.interest.co.nz/personal-finance/123007/sbs-bank-pushes-its-one-year-term-deposit-rate-offer-15-year-high-65-and
Interest paid monthly it seems.
https://www.sbsbank.co.nz/invest
Quote from: Onemootpoint on Jul 17, 2023, 11:56 AMSBS Bank pushes its one year term deposit rate offer to a 15 year high of 6.5% and well above every other bank. We are moving into an unfamiliar zone where some TD offers are higher than inflation
https://www.interest.co.nz/personal-finance/123007/sbs-bank-pushes-its-one-year-term-deposit-rate-offer-15-year-high-65- (https://www.interest.co.nz/personal-finance/123007/sbs-bank-pushes-its-one-year-term-deposit-rate-offer-15-year-high-65-and)and (https://betpokies.com/minimum-deposit-casinos/10-dollar)
Interest paid monthly it seems.
https://www.sbsbank.co.nz/invest
This looks like increased competition between banks to attract deposits. I wonder how much other banks will raise this rate and whether they will raise it at all?
8% Capital bonds from SBS as well.
https://www.sbsbank.co.nz/sbs-capital-bonds-2
Quote from: CalBe55 on Aug 04, 2023, 05:20 PMThis looks like increased competition between banks to attract deposits. I wonder how much other banks will raise this rate and whether they will raise it at all?
Their special rate has now come back down to a mere 6% on the 1 year. The main banks are hovering just under 6% for the moment.
It had to happen....the first of the 5 main banks to offer a 6% term deposit rate on an 18 month term at ANZ. Will the others follow suit? Probably.
Quote from: Onemootpoint on Aug 23, 2023, 06:43 AMIt had to happen....the first of the 5 main banks to offer a 6% term deposit rate on an 18 month term at ANZ. Will the others follow suit? Probably.
And they are doing. BNZ's online 18 month rate now 6% and Westpak is first off the block with 6% for 2 years. Where will it all end I wonder?
Quote from: kiwi2007 on Aug 28, 2023, 10:20 AMAnd they are doing. BNZ's online 18 month rate now 6% and Westpak is first off the block with 6% for 2 years. Where will it all end I wonder?
The FED's JP last week hinted that after a few months of holding the current rate it may go higher yet if the economic numbers don't please them. I wonder whether our RB will be keen to do the same. I am not so sure they would want to further increase, but who knows.
Heartland offering TD 6.15% for 8 months to existing customers
In terms of advertised rates, each of the 5 main banks - except BNZ - offer 6% at either 12, 18 or 24 months.
ASB bank moves the 6% term deposit rate offer to a six month term, and raises its three year offer to a market-leading 6.10%
https://www.interest.co.nz/personal-finance/124731/main-bank-moves-six-percent-rate-offer-six-month-term-and-raises-its-three
Heartland looking uncompetitive for a challenger bank especially for rates after one year.
https://www.chrislee.co.nz/taking-stock
"......For some time we might find a 5% return, without capital volatility, is rather more appropriate for most retired investors, than the hope that a new government will energise the business sector and help that sector to magical levels of profits and investment returns."
I guess this applies to both bonds and bank deposits.
Over the years I think the average annual return from the worlds stock markets has been in the region 0f 7 or 8% so if you can get 6 or 7% from a deposit or a bond and a 'guaranteed-ish' return of your investment it really seems to make sense. (But lacking in 'excitement'').
And down we go: Inevitable really and I'd imagine others will follow PDQ.
ANZ has cut its two-year term deposit by 25 basis points to 5.75 per cent, while its four-year term deposit rate drops 15 basis points to 5.3 per cent and its five-year rate by 25 basis points to 5.2 per cent.
https://www.nzherald.co.nz/business/interest-rates-anz-cuts-mortgage-and-deposit-rates/DZYZ3B355NBYZMI3LPIV6HY7WE/
Quote from: kiwi2007 on Dec 19, 2023, 08:34 PMAnd down we go: Inevitable really and I'd imagine others will follow PDQ.
ANZ has cut its two-year term deposit by 25 basis points to 5.75 per cent, while its four-year term deposit rate drops 15 basis points to 5.3 per cent and its five-year rate by 25 basis points to 5.2 per cent.
https://www.nzherald.co.nz/business/interest-rates-anz-cuts-mortgage-and-deposit-rates/DZYZ3B355NBYZMI3LPIV6HY7WE/
Punters better lock in long term rates >5%pa pretty quick before they have to face up to 4% or even 3% rates
Quote from: winner (n) on Dec 26, 2023, 09:09 AMPunters better lock in long term rates >5%pa pretty quick before they have to face up to 4% or even 3% rates
Obviously - they could as well buy REITS. Dividends paid through a PIE account command a friendlier tax-regime than interest rates from savings accounts (or bonds).
Ah yes, and Interest rates down means REITS going up - and assuming you buy them for the dividend, you don't even need to pay taxes for the capital gains.
But yes, in both cases - don't wait too long. Interest rates will go down at some stage and REITS will go up in sync.
Quote from: BlackPeter on Dec 26, 2023, 09:38 AMObviously - they could as well buy REITS. Dividends paid through a PIE account command a friendlier tax-regime than interest rates from savings accounts (or bonds).
Ah yes, and Interest rates down means REITS going up - and assuming you buy them for the dividend, you don't even need to pay taxes for the capital gains.
But yes, in both cases - don't wait too long. Interest rates will go down at some stage and REITS will go up in sync.
Seems too good to be true eh Pete
And if some punters think REITs are a bit dodgy they can always buy high yielding safe things like Genesis ........ or even take a risk on Turners lol
36% growth in term deposits in the last year ! https://www.nzherald.co.nz/business/to-save-or-invest-warning-as-bank-term-deposits-hit-213b/ZBGHUUQHS5AXJEFYGHUL44VMPA/?lid=db0mq7cja8s9&utm_source=newsletter&utm_medium=nzh_email&utm_campaign=News_Direct_Business_Headlines&uuid=ae2dd95d629344ca8119b12a0d7d7338
SBS have a special TD offer of 6.5% for 6 months at the mo.
Heartland Bank has a market leading 9 month rate of 6.25%.
Quote from: Basil on Jul 01, 2024, 03:20 PMHeartland Bank has a market leading 9 month rate of 6.25%. ...hmmm
And attractive mortgage rates under 7% ....hmmmm
Quote from: Basil on Jul 01, 2024, 03:20 PMHeartland Bank has a market leading 9 month rate of 6.25%.
And sharp mortgage rates ...mostly under 7% ...like 3 year at 6.35%
Guess where they see interest rates heading
No need to guess mate, it's perfectly obvious.
NO those comp props arnt going anywhere as the RBNZ doesnt know how to cut anything... they have forgotten..central banks are terrified of the I word...
At the moment the ocr and accompanied monetary policy seems to be being used as a binary switch, either off or on.
The danger is that unless it is switched off very soon there will only be a yawning chasm for the landing strip.
In order for there to be any sort of attempted landing, once inflation has been temporarily banished, there has to be actually something to land upon, some sembelence of a functioning economy remaining.