Some term investments have provided good returns, but others haven’t rewarded investors for the high risks.
Quick guides
What is a term investment?
Term investments have 3 key features:
- You commit your savings for a set time period.
- You are promised a fixed rate of return.
- At the end of the set time period you get your initial investment back.
The set time period of a term investment can range from 7 days to 5 years.
The interest rate is set upfront, so you know what you're getting. This is why term investments are also called fixed-interest investments. Interest on your investment can be paid monthly, quarterly, half-yearly, annually or 'on maturity' (at the end of the set time period).
Term or fixed-interest investments promise good returns and a safe place for your money. However, the collapse of finance companies recently shows that this is not always the case. Some term investments have provided good returns, but others haven't rewarded investors for the high risks.
Important
Like you, we can't predict the future - which means we can't guarantee the performance of any company or investment. Consumer NZ does not endorse any specific company, scheme or investment. ConsumerSaver is a good starting point - but, before you commit, we strongly suggest you seek independent financial advice. See our full disclaimer.
