But as the share market came back down to earth in 2022, those who were unable to handle the volatility panicked and moved their money back to cash, where they should have stayed in the first place. However, this worked out great for those investors who were able to make a 20% return in 2021.
In 2020, conservative investors were put off by the paltry returns on term deposits, so they began to turn to other options such as shares and investment properties. But why did people start to turn away from term deposits in the first place? Back in 2008, it was possible to get 8% for a term deposit, while in 2020, lucky savers could only get 1%. It’s important to keep in mind that term deposits go in and out of fashion just like anything else.
As a result, many people are considering putting their money into term deposits to take advantage of these good rates. With all banks now offering over 5% on a one-year term deposit, Heartland bank has even gone as high as 5.7%. Interest rates in New Zealand have been on the rise lately, and while this may be bad news for borrowers, it is great news for savers.
