Savings deposits still a good investment option

This month, the Reserve Bank kept the cash rate on hold at 2.50 per cent and governor Glenn Stevens said: “The most prudent course is likely to be a period of stability in interest rates.”

Income from deposits continues to be low and recent cuts to bonus saver and online accounts promise another year of low returns.

Low interest rates imply low growth and low returns across asset classes compared to historic returns. In theory, investing in higher risk assets such as shares and property should improve returns, but investors have no way of knowing what those returns will be until they sell.

Source: The Australian