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Bank Deposit Compensation Scheme:
Australian Bank Deposits
The current compensation scheme covering Australian bank deposits protects depositers upto the value of $250,000 AUD should the bank be unable to meet it's financial obligations.
WARNING! - Any bank deposits in excess of the set Government compensation scheme are at very high risk should the bank go in to financial difficulties. Simply put - you could lose 100% of your deposit(s). RIO strongly recommends that members do not take this risk, especially since banks are offering little reward for the degree of risk taken by you (the depositer).
To quantify this
risk, it is possible you could sustain a 100% loss versus set bank deposit return 4%- Risk/Reward ratio very poor! Why take the risk if you don't need to?
Recommendation; firstly check that your bank is covered by the compensation scheme if not move banks. Secondly should any member have bank deposits in excess of government compensation scheme they should open a second account, this must be at another bank to enable multiple instances of compensation.
It is important
to make sure that the bank chosen isn’t owned by or a subsidiary of the bank you already have deposits with. For any member with large amounts of cash on deposit firstly this is not recommended for several reasons, the main reason being that the purchasing power of the physical money depreciates over time. For those who simply prefer having large amounts in cash on deposit then at least protect your capital, by diversifying such deposits to several unconnected bank accounts also ensuring that each deposit remains below the set compensation scheme level at least you've done your part to protect the basic capital. Not to do so would be simple disrespect for money and plain ignorance.
Capital Protection Products Vs. Australian Bank Deposit Accounts
| Product |
Capital Protection |
Investment Term |
Annual Interest |
RIO Fixed Income Bond |
100%
|
5 Years
(Interest Paid Quarterly or bi-annualy) |
7% |
Highest Interest Australian Bank |
Limited 0% over $250k AUD |
1 Year |
4.61% |
There is a world of difference in Bank deposit versus the RIO Fixed Income Bond in terms of both Risk and reward.
Bank deposit
Bank guarantee is limited to that set by regulatory authorities in Australia which is currently set at $250,000 AUD, as such capital over this amount is not protected and at Risk. (risk/reward very poor).
Specifically designed for small lump sum, bank deposits are usually facilitated via high street banking. (banks are exposed to risk by nature of their business) Risk/Reward ratio poor
When contemplating retirement you should not expose capital to significant risk as such bank deposit accounts holding large sums for retirement may not be wise and could be disastorous.
RIO Fixed Income Bond Series 2 (Improved Surety)
With the RIO Fixed Income Bond 100% of capital is guaranteed / no risk to capital.
The bond returns 7% before tax, however tax can be mitigated completely in many circumstances should you require information on this process we are happy to provide information.
Based in Sterling conversion from AUD to Sterling currently represents (12th March 2013) real value and a currency gain can be expected on top of 7% pa fixed return for the fixed period being 5 years.
Designed for retirement and large lump sum investments, by nature this type of vehicle bares no risk to capital and offers 100% protection - combined with a fixed return for fixed period. (risk/reward ratio Excellent)
Current Australian Bank Deposit Rates
| Deposit Account Type |
|
Term |
APY |
Account Details |
| UBank 1 Year Term Deposit |
 |
1 year |
4.61% |
The interest rate for this Uba...- AUD - Mar, 2013 |
| CBA 5 Year Term Deposit |
 |
5 year |
4.60% |
This rate requires an investm...- AUD - Mar, 2013 |
| AustralianSuper 1 Year Term Deposit |
 |
1 year |
4.55% |
The rate is applicable to the ... - AUD - Mar, 2013 |
| ING Direct Australia 1 Year Term Deposit |
 |
1 year |
4.50% |
The Interest Rates for this 12...- AUD - Mar, 2013 |
| Westpac 2 Year Term Deposit |
 |
2 year |
4.35% |
Rate is applicable for deposit...- AUD - Mar, 2013 |
| Bankwest 1 Year Term Deposit |
 |
1 year |
4.35% |
The 12 month / 1 year term d...- AUD - Mar, 2013 |
| Credit Union Australia 1 Year Term Deposit |
 |
1 year |
4.35% |
This CUA interest rate p.a ind...- AUD - Mar, 2013 |
| NAB 2 Year Term Deposit |
 |
2 year |
4.30% |
Main Rate is applicable for a ...- AUD - Mar, 2013 |
| ANZ 2 Year Term deposit |
 |
2 year |
4.30% |
Rate is available for amounts... - AUD - Mar, 2013 |
| Suncorp Bank 1 Year Term Deposit |
 |
1 year |
4.30% |
Interest Rate for this Suncorp...- AUD - Mar, 2013 |
| BOQ 1 Year Term Deposit |
 |
1 year |
4.25% |
BOQ / Bank of Queensland Term ... - AUD - Mar, 2013 |
| CBA 1 Year Term Deposit |
|
1 year |
4.20% |
- The investment requires a mi... - AUD - Mar, 2013 |
| NAB 1 Year Term Deposit |
|
1 year |
4.20% |
Main Rate is applicable for a ...- AUD - Mar, 2013 |
| Macquarie Bank 1 Year Term Deposit |
 |
1 year |
4.20% |
The rate applicable is for a 1...- AUD - Mar, 2013 |
| ANZ 1 Year Term deposit |
|
1 year |
4.15% |
Main Rate is available for amo... - AUD - Mar, 2013 |
| ANZ 6 Month Term deposit |
|
6 month |
4.15% |
The product is for a 6 month t...- AUD - Mar, 2013 |
| CBA 3 Month Term Deposit |
|
3 month |
4.15% |
For investments of $50,000 to... - AUD - Mar, 2013 |
| St George Bank 1 Year Term Deposit |
 |
1 year |
4.15% |
The following interest rate ap...- AUD - Mar, 2013 |
| Bank of Melbourne 1 Year Term Deposit |
 |
1 year |
4.15% |
The current interest rate for ... - AUD - Mar, 2013 |
| Bank SA 1 Year Term Deposit |
 |
1 year |
4.15% |
The interest rates applicable ...- AUD - Mar, 2013 |
| Rural Bank 1 Year Term Deposit |
 |
1 year |
4.15% |
The interest rate applicable f...- AUD - Mar, 2013 |
| Bendigo Bank 1 Year Term Deposit |
 |
1 year |
4.15% |
The interest rate for this one... - AUD - Mar, 2013 |
| Westpac Business Term Deposit |
|
1 year |
4.15% |
The account requires a minimum... - AUD - Feb, 2013 |
| ANZ 3 Month Term deposit |
|
3 month |
4.10% |
90 day or 3 month Rates are fo... - AUD - Mar, 2013 |
| NAB 6 month Term Deposit |
|
6 month |
4.10% |
Rate is applicable for deposit...- AUD - Mar, 2013 |
| Westpac 1 Year Term Deposit |
|
1 year |
4.05% |
Rate is applicable for a the p...- AUD - Mar, 2013 |
| Westpac 6 Month Term Deposit |
|
6 month |
4.05% |
Rate is applicable for deposit...- AUD - Mar, 2013 |
| NAB 3 Month Term Deposit |
|
3 month |
4.00% |
Rate is applicable for Amounts... - AUD - Mar, 2013 |
| Westpac 3 Month Term Deposit |
|
3 month |
3.00% |
Rate is applicable for a the p...- AUD - Mar, 2013 |
| NAB 1 Month Term Deposit |
|
1 month |
2.90% |
... - AUD - Mar, 2013 |
| Westpac 1 Month Term Deposit |
|
1 month |
2.90% |
The following deposit interest...- AUD - Mar, 2013 |
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