Term deposit tricks and traps

Savers rolling over term deposits need to ensure that they are getting the best rates available. Banks offer different rates for different terms, creating a rollover rate trap.

“Make sure your bank's not taking you for a ride by automatically rolling you over on a three-month deposit when you can get a better deal on six months,” said Financial strategist Theo Marinis.

Savers can get stung by penalties if they break a term deposit early so use several different deposits with different maturity dates said Marinis. While rates have dropped, it is not always wise to chase higher incomes from risky assets such as shares.

“Remember why you chose cash in the first place. Don't go trying to get all aggressive now.”

Source: Herald Sun