It was recently reported that the major banks cut savings interest rates over the holiday period, leaving some savings account earning as little as 0.5 per cent.*
This ‘cash drag’ is needlessly costly to the public and they are urged to review how much money they have sitting in everyday bank accounts, earning low interest, and to consider alternative ways to grow their cash such as in term deposits.
A term deposit allows investors to park their funds for a set period of time with an agreed fixed rate of interest paid at maturity. Investors can also choose the length of their term deposit and the bank or financial institution whom they wish to invest with. When a term deposit is placed with an APRA regulated Authorised Deposit-taking Institute (ADI), all deposits up to $250,000 are guaranteed by the Government. This guarantee applies per entity per ADI.
In Australia alone the cash investment market is worth over $2 trillion with $873 billion of that coming from household investors made up of hardworking mum and dads. However, annual lost interest by Australians who are not managing their surplus cash investments actively, amount to at least $4.22 billion and can be even higher, a calculated projection by Cashwerkz using RBA and APRA statistics – and that is just one sector of the investment market.
These funds are lost to investors who otherwise could have harvested this benefit if they invested their “spare” cash into term deposits. Not comparing current market term deposit rates at roll over is a typical habit costing hard working Australian billions.
“It is concerning to see how much money is lost by Australians not maximising their term deposit return”, said Cashwerkz CEO, Hector Ortiz.
“In the past, the investment process for term deposits has been slow and laborious, making it difficult for investors to take advantage of special rates, which is why Australians need to look at platforms such as Cashwerkz to ensure they are getting every cent possible for their cash investments. It is important to actively manage maturities, shop around when necessary and utilise the online tools available”, said Hector.
Traditionally a market where there has been little product or technology innovation, investors were plighted with time consuming applications, increasingly complex compliance demands and laborious paper work. While investors can now go onto bank websites and research rates, switching between banks can still be time consuming, and often investors ‘can’t be bothered’, resulting in a continuous rollover of funds and not taking advantage of current market rates.
Fintech company Cashwerkz provides a secure and simple solution to the term deposit investment process. The online platform enables investors to access a range of rates from various Australian banks and financial institutions in the one place and seamlessly roll over their term deposits at maturity. There is a one-off identity verification and application process which means investors can easily switch between banks at the click of a button.
“We make investing in term deposits easy by streamlining the entire process. Cashwerkz presents an investor with current term deposit options and they choose where to place their money, then Cashwerkz facilitates the process for them. The same thing happens at maturity, as they approach the end of their term, it takes the click of a button to select a new term deposit product”, said Hector.
Investors are able to transact on the platform utilising their own cash management account or transactional bank account, allowing them to maintain full control of their money and transparency when transferring between banks. Cashwerkz never touches or directs the investor’s money, a unique method adding an extra level of security around the investment process.
Term deposits provide a secure and stable return on investments. This is becoming increasingly important in a vulnerable market where savings interest rates are at record low.
To find out more information how to maximise term deposit investments, speak to Cashwerkz.
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