Kiwis Are Seeking a Better Return on Their Savings
8 November 2018
More Kiwis are seeing the benefits of investing their savings in term deposits outside of the big banks, leading non-bank lender, Liberty, said today.
Liberty established its deposit taking arm in 2003 and the popularity of the fund in recent years has seen its portfolio grow significantly. It’s recently surpassed the $50 million mark of current deposits having seen 127% growth since 2016.
Liberty chief executive Mark Collins believes investors want more choice than what the big banks can offer.
“We’re definitely seeing a significant shift in the number of customers that are seeking out other options. Many property investors have reduced their portfolios and released capital in recent years. They want to put their money into a term deposit but they are unhappy with the rates at the big banks. Another driving factor in Liberty’s growing term deposit portfolio is baby boomers.
“We’re seeing more baby boomers downsize in preparation for retirement. Their intention is to use any capital generated from the sale of their home to fund their golden years, but they are looking for a higher return.
“Average 12-month term deposit rates at the banks for investments over $10,000 are around 3.30% - that’s historically very low. If you’ve got a decent amount to invest and want the security of a term deposit, you want that money working for you as best it can,” said Mr Collins.
Interest rates in the non-bank sector can start at 4.05% for investments more than $5000.
“When you can get an increase of 20% on your return somewhere else, and that organisation is still investment grade rated, smart investors take notice.
“Further, the Reserve Bank of New Zealand supervises non-bank deposit-takers such as Liberty which has implemented sound governance and risk management practices. By providing additional choice to customers, we’re helping more Kiwis achieve their financial goals,” said Mr Collins.