Term deposits have been the go-to “safe” investment for generations of New Zealanders. You put your money in, know exactly what you’ll get back, and sleep well at night. But in today’s economic landscape, are they really the best choice?
The investment world has evolved dramatically. Today’s investors have access to options that were once only available to the wealthy, and technology has made investing more accessible than ever.
The key factors that should drive your choice:
- Risk tolerance – How much volatility can you stomach?
- Time horizon – When do you need this money
- Goals – Are you saving for retirement, a house, or just growing wealth?
“Don’t put all your eggs in one basket”
This is more relevant than ever. But how do you diversify when you don’t have millions to spread around?
Managed funds
Think of managed funds as hiring a professional chef instead of cooking everything yourself. Fund managers pool your money with thousands of other investors, giving you access to a smorgasbord of investments you could never afford alone.
What to look for in a fund:
- Asset mix – What are they actually investing in
- Fees – How much are they charging? (This matters more than you think)
- Liquidity – Can you get your money out when you need it?
- Tax efficiency – Are they structured to minimize your tax bill?
- Track record – How have they performed over different market conditions?
Getting a professional to help guide you
The investment landscape can be overwhelming. Term deposits aren’t bad – they’re just limited. Today’s economic environment, putting all your savings in term deposits might not be the best move. A good financial adviser will help you build a strategy that fits your life. Come and chat with one of our Wealth Advisers.
