Hi there,

i am new at SMSF, and just wanted to know where to find the best term deposit rates. Is it true that the banks consider a SMSF account as a business account and thus a lower rate.

thanks in advance!

hi muhaha,

At this stage of the cycle, depends on how much money you are wanting to put away in your term deposits. Do you want to lock up money for a while? Are you dependent on the income for paying a pension? Do you want at-call, or 24 hr, access?

With the 90 day BBSW around 6.35% it is going to be very hard to beat this return for a 'no worries' deposit. Rabobank will do 6.6% at call for SMSFs (that's what they told me on the phone) but you are right that most of the others (ING and the big 4) expect SMSFs to be in with Corporate side of things and aren't offering as good a deal as for retail clients.

http://www.fixedincome.com.au/ is a broker (FIIG Securities) and they deal in larger amounts - wholesale. They have credit union TDs and a product called Diverseport which is 90% investment grade and the rest is Hybrid securities that can add a few points to the return.

Another way of getting a good return is buying investment grade Hybrid Securities on market. the recent Perls IV raising from Comm bank is paying a good return if the franking credits are taken into account

As with everything, risk is roughly in relation with reward. The folly of the Fincorps et al is there for all to see.

Not advice, DYOR

I saw Rabobank 6.6% ad in the papers in the weekend but wondered who they were .
Here is a link ...cheers eG

http://en.wikipedia.org/wiki/Rabobank

thanks for the links guys much appreciated. term I am looking for is about 180 days to 1 year, and amount of 500k plus.

Suncorp money market latest was 6.25% PA for 30 days , on much lower amount .I'd say U could achieve around 6.40% PA for your amount and longer term Why do u want to lock it for 180/360 days ? ...cheers eG

Hi Eg,

I am thinking that the rates are more likely to go up in the next 6-12months then down, therefore dont want to lock myself in.

regards

muhaha

for that amount use a broker - Mariner or FIIG are two that come to mind

got these from http://www.termdeposit.com/search rates

.................180-day,.....1 year
Major Bank.... 6.63%.......6.78%
Regional Bank...6.63%......6.88%
Building Society 6.63%......6.88%
Credit Union.... 6.78%......7.03%
Debenture Issuer 6.95%....7.20%

Muhaha,

For amounts such as yours it is often possible to negotiate a higher than advertised rate for a term deposit or a bank bill. I use http://www.Cannex.com.au (Rate City webpage) to find the ten most competitive rates available and then ring the Treasury section of the banks I select to obtain the best rate actually available at that time.

I ring early in the business day ( say 9 to 9.30 )with the money available for lodgment that day – often this can be done, by arrangement, through the local branch of the bank concerned. My experience is that you can often obtain rates of say 15 bps above a bank’s advertised rate. This may not sound much but on half a million for 12 months it means an extra $750. In a tax free or tax advantaged super fund this can be a useful bonus on a lower return investment.

Rates from non bank borrowers such as Credit Unions and Building Societies are usually higher because they are generally perceived as higher risk than banks. These institutions will also often negotiate higher rates for large amounts.

Cheers,
Catron

A debenture offered by RAC in WA is paying 7.00%, for either 6 or 12 months

https://perthapp.rac.com.au/debentures/

when you think about it, the RAC raises capital to be used for car loans. An ex-banker told me that the default rate is pretty low as , in his experience, those with car loans will hang on to the loan and make repayments for as long as they can. Its usually the last thoing to default on. And LVR calculations would build in a good buffer

Also the risk is pretty well spread as the 'portfolio' is composed of many, many small loans, rather than say property.

Anecdotal stuff, I know, and not advice

I saw today in the city of Sydney that CITIBANK offers 7% as an intro
cheers eG

Wbc has an est return of 5.9% next yr, + fr credits-s/p likely to incr by as much as 10% also, that's where some of my excess cash went