Thinking of Going with a 5.10% Term Deposit for 5 Years, Easy but Smart Move?

• 1
• 2

• 

  Sinnerator on 12/05/2024 - 08:34

  -1

  banks never lock anything down in favour of the customer
  you are better off shorter terms and switching when a better deal pops up

• 

  May4th on 12/05/2024 - 09:42

  +1

  how old are you? if you aren't retiring any time soon and have a 5 year horizon then there's potential for much better gains through index funds or crypto depending on your risk appetite

• 

  SoapyWooder on 12/05/2024 - 10:36

  What's the cheapest fee sp500 ETF, please help?

• 

  liongalahad on 12/05/2024 - 10:48

  Definitely not a good idea. Invest in index funds instead.

• 

  soggypotato on 12/05/2024 - 23:38

  If you don't need the money then just do it for fun and for the experience

• 

  Cluster on 13/05/2024 - 00:05

  +1

  I locked in a 7.5% 5 year term deposit at the start of the GFC with Rabobank. As central banks kept cutting interest rates my smile grew wider. It is possible to beat the so called smart people with all the computers. Just look at how many interest rate rise predictions the CBA got wrong. All throughout 2022 they kept saying maybe 1 or 2 more at most. Wrong again, and again.

  Is locking in 5.1% a smart move now? I honestly don't know.

  • 

    borgainerz on 13/05/2024 - 09:55

    Nice one, I think you got the highest offer

  • 

    Ave Maria on 14/08/2024 - 17:34

    Did the same (7.5% for 5 years in 2010) I even got an 8% 5 year ladder TD ( interest added to TD each year until maturity) with Citibank at the same time.
    Citibank was the only bank offerring ladder TDs, no other bank offers that product in Australia )oe ever will again as NAB took over Citi).

    That was for my SMSF, long time ahead from retirement so liquidity was not an issue. Best investment decision I ever made.

    We would never likely ever see such high rates again ( as politics have taken over the decision making from the RBA) althoun in NZ Rabo offers 6.10% TDs

• 

  Prosp24 on 13/05/2024 - 01:23

  Not great, as interest earnings would be taxed at your marginal tax rate.

  Investment options that utilise capital gains tax discount should provide better post-tax outcomes. Everyone's indivudal financial situation will be differ.

• 

  Hangryuman on 13/05/2024 - 17:07

  5.1%pa fixed for 5 years - with break costs if you withdraw earlier - not recommended.

  I have 3 ETFs - which my IRR spreadsheet shows as having returned 7%, 19% and 22%pa last financial year before tax (which I think you'd pay anyway on your 5.1% interest). On value alone, they have increased by 11%, 25% and 64% in the last 12 months.

  the rule of 72 for doubling - divide 72 by the growth rate to find how many years to double your money - indicates 22-5.1%=~17% more would double your money in 72/17 = a bit over 4 years.

  So - in 4 years time would you rather have double your money - or not ?

  • 

    kiitos on 16/05/2024 - 19:24

    Which ETFs?

• 

  cupcake on 31/05/2024 - 13:38

  Yes.

• 

  deandownunder on 01/06/2024 - 09:12

  When this question was first asked the comment posted on 10th May was that interest rates were going to remain static or go lower. How times change in less than a month. Blind Freddy can see the RBA is heading into a tightening phase so money invested for 5 years @ 5% would not give the best return. I would only be investing on a 12 months max.

• 

  Ave Maria on 14/08/2024 - 17:15

  Rabobank Term Deposit rates just took a skydive - the current TD rates not even worth a bother to look at.

  Better leave the money on at call savings account - good optons from 5.4% to 5.55% availabe wth ME bank, ING, UBANK, AMP and suprisingly for now with Rabobank

  Term—-Maturity—Month-4Month-6Month—Annual
  1 months 2.00%
  3 months 4.85%
  6 months 4.80%
  9 months 4.70%
  1 years — N/A —4.51%—4.52%—4.55%—4.60%
  2 years — N/A —4.17%—4.18%—4.21%—4.25%
  3 years — N/A —4.17%—4.18%—4.21%—4.25%
  4 years — N/A —4.41%—4.43%—4.45%—4.50%
  5 years — N/A —4.51%—4.52%—4.55%—4.60%

• 1
• 2