Its about Term: Make fixed term investments work for you

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Do you want to access self control and afford the bigger and better things in life? Sandy Bhalla shows you how to choose a term deposit account that’s right for you.

March 24, 2010

Unless you lock your money away in a cast iron box and throw away the key, it can be very tempting to chip at your hard earned dollars and spend a little bit here and there, until, eventually, there is nothing left. So how does one master self control and save?

Luckily there is one simple solution: lock away your money for a fixed term and get rewarded for it. But the only problem is, how do you know which term deposit account is right for you?

Finding one to suit your terms
Term deposits are a great way to earn a passive income. They offer a fixed rate of interest for a fixed time period which means, you have the peace of mind of knowing your money is safely out of temptation’s way while it continually grows. You can now finally turn your savings goals into reality.

For example, if you are hoping to go on a holiday in six months time and you have $5,000 in excess cash; why not invest it in a short-term deposit? Citibank currently offers one of the top fixed rates of 6.30 percent for six-months. So just by sitting your excess funds in this account, you would have accumulated an extra $157.50 for your trip at the end of the term.

For the longer goals
Or what about something further down the track? Perhaps you are planning for your wedding in two years time and you have been given $10,000 towards your big day. You may want to keep it out of temptations way until your big day and invest it.

Bank of Cyprus is currently offering a high 6.85 percent fixed term rate for two years, so by the end of the term you would have enough for a short honeymoon or pay for your gown with an extra $1,370 to spend.

Planning ahead
If you have some extra money from the sale of your car, house or furniture, you may like to invest it in a low risk product for your child’s education or for a rainy day.

A term deposit of $15,000 for example, invested for five years with RaboPlus, at a current rate of 7.40 percent would provide an extra $5,550 by maturity. After the five-year term is up, you can reinvest the new amount of $20,550 to grow your money even further.

By depositing your cash in a term deposit, you can now enjoy a more relaxed approach to wealth creation. Comparing rates online will help you take control back so you can enjoy the bigger and better things in life. Don’t you think it’s about term?


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