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  1. #16
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    Nov 2018
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    Christchurch
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    364

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    Quote Originally Posted by GTM 3442 View Post
    If I was an Australian looking at Term Deposit rates, I would be finding that 2.7% on offer in New Zealand quite attractive:

    https://www.anz.com.au/personal/bank...fees-terms/#td

    I have some Australian term deposits coming due this month, and those AUD sure won't be going back into bank TDs. They'll be going into an Australian government bond ETF, current yield +/-2.75%, maintaining the current asset class allocation and currency profile.

    If I was a New Zealander and convinced that the NZD/USD rate was due to fall, I would be looking at a 0% foreign currency account - possibly in Australia to take advantage of the government deposit guarantee scheme. I note that Betashares are forecasting an AUD/USD rate of $0.62 later in the year, and the NZD has a strong tendency to follow the AUD.

    As far as fees, charges and the like go, the New Zealand financial services industry may have become dramatically cheaper over the past 25 years, but it remains ridiculously expensive and overpoweringly entitled, and the options for investment outside New Zealand may be cripplingly limited, but those are, sadly, the rules of the game.
    Yes they are rules of the game according to NZ's FMA. Interestingly, they're imposing foreign brokers 'who provide services to NZ residents, AND if these firms offers derivatives / options / FX in their business, then they must be 'licensed by the FMA' in order to deal with NZ clients. This is sound a bit extreme and I remember globally how bad it was when the US imposed FACTA around the world. It's 1 thing to ask banks to report to the IRS for tax reporting on their US citizens but, to say to foreign sovereign nations that they're doing things illegally by serving to NZ clients?

    As a matter of interest, here is cash deposit schedule at TDAmeritrade. FDIC insured and funds that are simply left in the account (ie. not actioned to be put in a term deposit):

    https://imgur.com/ONv1ZXc

    Canada use to have similar fee schemes by their brokers, circa in the 80s and early 90s. It could not of lasted long being next to the US but in NZ's case, I highly doubt it would change much. Not with FIF which distorts the global investment field.

  2. #17
    Ancient Mariner HKG2301's Avatar
    Join Date
    May 2020
    Location
    Whangarei
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    32

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    Quote Originally Posted by peat View Post
    if you (or your proxy) really cant accept the rates offered by a Trading Bank then another option is to lend to NBDT's, Non Bank Deposit Takers. Finance companies as such, and there are higher rates available with perhaps not so much risk as you thought. You could examine the reports of say Liberty or General and see what you think...
    I'm in a similar situation: cash heavy, which is a good place to be right now, I reckon. Until recently, I was invested with Liberty Financial at good rates (4.4%) but it was due to drop to 3.4% on renewal, so I took the cash. I'm sure they'll be fine, but Liberty's BBB- rating wouldn't let me sleep at night in these uncertain times. Now I'm looking at commercial property and/or NZX shares, but in no rush to jump into either. I can see all the world's markets re-visiting their March lows before we work our way out of this recession, even NZ.

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