For those on 30 or 33% tax rates, it would seem obvious to choose a PIE term deposit over a straight Term Deposit. It is only taxed at 28% (or whatever lower prescribed rate). I think the interest also does not add to your income for tax bracket determination.
A Term Deposit is held with the bank, but the PIE deposit is held by a trust.
As far as I can see there is a tax benefit and no difference in risk of loss of capital (eg. bank going bankrupt still impacts the trust anyway).
What is the catch? Why is the TD still offered? Is the TD only still offered because it makes no difference to lower income earners?