Savings, Commerse and Economic :: Market news

Fixed deposit returns take a hit

FALLING interest rates have hit savers hard with some term deposits offering rates as low as just one per cent.

While borrowers have revelled in the low interest rate environment, savers have been stung with measly returns on their cash deposits.

Financial comparison website InfoChoice found a $10,000 deposit for 12 months attracted an average interest rate of just 2.63 per cent, giving savers just $263 on their savings over the year.

Returns on the same amount for 24 months are not much better with an average interest rate of just 2.7 per cent, giving a $540 return over two years.

Before the Reserve Bank of Australia began its downward cash rate-cutting spiral in 2011, savers were seeing returns around the six per cent mark but since then theyve been slashed at least in half.

InfoChoice spokeswoman Laura Crowden urges savers to actively manage their deposits and warns them to not set and forget their stashed cash.

To get the best return savers should regularly shop around and compare rates and most importantly be willing to move their money to a different institution to get the best rate,’ she says.

If you do nothing at the end of your term deposit period your bank will simply roll over your term deposit into a new term deposit with the same terms, although its likely that interest rate will be lower.

For some savers, online savings accounts or at-call deposits may also be an option because many accounts have better returns than fixed deposits.

John Edginton, the chief executive officer of term deposit marketplace Cashwerkz says while term deposit rates are low they are a safe way to store cash.

Term deposits give you that security, they are probably one of the safest investments from a cash preservation point of view,’ he says.

The best interest rates on term deposits are for five years, but you will find rates on one to three year terms will be pretty flat.

Interest rates on five-year term deposits are often just over three per cent.

The Reserve Bank of Australia cut the cash rate to just 1.75 per cent in May and its expected there will be two more cash rate cuts this year.

How to bet 20 on the melbourne cup

GAMBLING be dangerous when done with money you can’t afford to lose, but nobody will begrudge you having a little flutter on the race that stops a nation today.

Melbourne Cup betting is tipped to swallow hundreds of millions of dollars from Aussies, with many once-a-year punters buoyed by last years winner Prince of Penzance paying $101 for every dollar bet on him.

A new report by IBISWorld says gambling is growing, largely through the rise of private website operators and sports betting.

Betting websites, interactive television channels and mobile phone applications that allow consumers to place wagers are likely to continue driving the industrys performance, it says.

Spring Carnival ambassador and model Natalie Roser, 26, says she doesnt mind a small bet.

I like to occasionally put $5 each way on the main races for a bit of fun, she says.

If youve set aside $20 to punt on the Melbourne Cup, here are some options.


If you simply want a horse to cheer for, stick with the office sweep. Last year showed that any horse in a sweep has a chance of winning. Its a pressure-free and homework-free way of getting involved.


If youre simply after bragging rights, a good bet is to spread your $20 across a few of the favourites. That way youre at least likely to get a place, but dont expect a handsome payout.

A moneysaverHQ analysis of Melbourne Cups over the past 20 years found that only two years 2008 and 2012 had a top three without a horse paying $13 or less. Youll need to do some homework studying the form guide.


The biggest payouts predictably come from the hardest bets to win. Last years trifecta the first three horses past the post paid $26,000 for a few dollars outlay, while someone who picked the first four pocketed almost $186,000. But beware the chances of winning are slim.

Punting experts recommend taking out a box trifecta and choosing six horses. If three of the six finish in the top three, you collect.