An article from Ben Brockhurst – our resident equity specialist
Term deposits not paying their way?
If you’re frustrated with the current term deposit rates – you are not alone. Many disgruntled investors have seen their income eroded as term deposit rates have consistently fallen from above 8% in 2008.
A couple of weeks ago the Reserve Bank of Australia (RBA) cut rates again to 2.25% – which is the same rate as inflation. Many economists are predicting further rate cuts in the months ahead.
Given these tough fixed interest conditions – your term deposits yield is merely keeping you in line with inflation – as long as you don’t spend it, or, pay any tax on it, or, see rates cut even further.