Source
r/PersonalFinanceNZ•
ncounter

Negatives to InvestNow Term Deposits?

I currently have an ongoing automatic deposit and fund investment going with InvestNow, and am looking at 3x rolling 3mo. Term Deposits as a better use of my emergency fund than the bank account it is currently sitting in.

The rates shown on the Investnow platform seem to match those provided directly from the providers (advertised at least). Are there any negatives to using Investnow rather than going directly?

For this assessment let's assume 3x ~$5000 TD @ 3 month terms (which automatically excludes ANZ with $10k minimums)

Posted Jan 7, 2020, 10:21 PM UTC

313
rowansims•

You avoid the hassle of setting up an account with another bank.

7
mattparlane•

InvestNow often seem to have better rates than going direct to the banks. For example, BNZ is currently 1.9% for 90 days direct, but 2.09% via IN. ANZ (which I know you ruled out) is 2% direct, 2.34% via IN.

Can't really think of any negatives... if you want to break you have to go direct to the bank and you may have to explain the situation, but that actually seems to be a positive to me, it tells me that the relationship is still between you and the bank, rather than having to go through IN for breaking. I haven't (yet) done any TDs via IN, so no first-hand experience.

5
beNiceeeeeeeee•

PIE t.d's are slightly better if your at the top rate, and InvestNow does not offer them, this is the only downside i see.

5
ncounterOP•

Is there a platform that gives access to multiple Term PIE providers? Being able to easily pick the best rate from a range of banks on IN each time a TD matures seems super easy...

2
beNiceeeeeeeee•

not that i know off, the difference between the big banks is so small i dont see it worth the effort even checking most times.

2
Hoidish•

You can probably get higher rates through the bank directly, but whether it is worth the hassle I’m not sure.

If it’s only 10-20bps difference I wouldn’t bother personally

2
beNiceeeeeeeee•

really? how? just ask? never tried myself have you been successful negotiating higher rates in the past?

1
Hoidish•

Yup just ask, generally they will have a sheet with advertised rates and what they can go to. And most don’t have portfolios to worry about (unless they are a commercial banker) so it is no skin off their nose given it to you.

Never done it myself. I was a banker though...

3
anothermoa•

Yeah, just ask. I don't use term deposits, but a close family member does this all the time. If a competitor has a better rate they go in to a branch and ask their bank to match it. The bank teller gives them a better rate without batting an eyelid.

1
monkeyking_au•

Another downside: You cannot have your interest paid out or compounded monthly/Quarterly

2
ncounterOP•

I feel that I'm missing something here, 3- month TDs are quarterly by design.

And I assume that if differing compounding options were available they would all be aligned to have an equal effective outcome.

What would the benefit be?

1
monkeyking_au•

Many banks allow interest to be paid out monthly, e.g. for income.

Some banks offer the same rate whether you go for compounding interest, or interest at maturity. It is slightly beneficial to go for the compounding option.

These may not be an important factors for you, but still a negative of InvestNow for TDs

1
ncounterOP•

Thanks for the clarification, that makes sense.

1