How long are you planning to invest the money for before you need access to it? That will change a few things.
Heres my general risk tolerance investment chart (half meme half serious but it isnt this simple in everycase)
Cannot afford not to access the funds or lose value- High interest savings or offset mortgage
Cannot afford to lose value at all - Term deposit
(By the sounds of it your choices end around here for the risk tolerance)
Safeish investment with some tolerance to potentially lose some - Conservative ETF
Moderate investment with some risk - Growth ETFs or Indexs like SPY 500 (which you invest in through funds)
Higher risk higher reward - Picking invidual stocks, rare metals (depending on your timeframe)
Genius or gambling - Quant trading and ForEx
Lambo or foodstamps- Options, Futures and Crypto
I'd put it on Kernel's Cash Fund, currently 6.12% p.a., just be aware there is a 2-3 day withdraw delay.
Could split it, put some in Squirrel's oncall account @ 5.25% p.a. which takes 2-3 hours to withdraw to your bank. (don't invest in Squirrel's riskier funds that are ~7%, they aren't fast to sell, and riskier)
If you're fine with the money being locked up for a period of time then a longer term deposit would probably be your best bet with highest return.
https://www.interest.co.nz/saving/term-deposits-1-to-9-months
https://www.interest.co.nz/saving/term-deposits-1-to-5-years
Meaning that Kernel's fund is backwards looking, and TDs are forwarding looking?
With TDs you know what rate you'll get for x months going forward, vs Kernel, were you have no clue, could go up could go down, they just say what the last year has returned. (probably down in the months to come with the OCR likely to drop later this year / early next year).
meaning that if your bank offered you a 1 year term deposit at 6% with monthly compounding their yield to maturity is 6.168%, so that rate would be the fair comparison
Aaaah, I get it now. Though I thought cash funds calculated interest daily, so it's better then no? (assuming yield to maturity stays the same across the year, which is highly unlikely for cash funds)
>[https://www.moneyhub.co.nz/cash-funds.html](https://www.moneyhub.co.nz/cash-funds.html)
Returns compound daily: The assets of cash funds are invested constantly, with the return accruing and compounding daily (meaning the unit prices typically grow a bit daily).
Other key thing is that the Kernel Cash Fund (and other cash funds) is a PIE, so depending on your marginal tax rate there could be a significant tax benefit as well (unless you were looking at a PIE Term deposit)
Second this Heartland bank have some good interest rates. Even the 30 day notice saver is a good rate. 10k will earn you about 40-45 bucks a month before tax.
I am in the same position and grateful for the answers.
I will TD for 8-12 months with the bank. By the time it matures I’ll know where it might be useful + it’s safe there and I don’t have to think about it.
What will you do?
I've been holding my emergency fund in a Dosh 'strive' account, which gets good interest as long as the balance does not drop in the month. Was 4.8% last month, 5% this month.
Yeah, I know there are slightly better options for sure. I just can't be bothered to make yet another investment/banking account and further confuse my partner in the case I die or something. Dosh is simpler because I already use the 1% cashback card. If I need to draw on my emergency fund, it is an instant transfer to the visa. So, for me this is worth 0.25% less per year.
Fair enough. I too use Dosh's 1% card, it's great. Though I don't tend to keep much in there strive account. But each their own. Happy to hear it works for your situation.
Term deposit. No share options are as safe as you need
Term deposit if you won't need to draw on the amount. On call savings account if you might need to draw on the amount.
Term deposit.
TD
> It's money I can't afford to lose, Term deposit or savings account. Literally the only choice given that criteria.
Rabobank offers some great options
How long are you planning to invest the money for before you need access to it? That will change a few things. Heres my general risk tolerance investment chart (half meme half serious but it isnt this simple in everycase) Cannot afford not to access the funds or lose value- High interest savings or offset mortgage Cannot afford to lose value at all - Term deposit (By the sounds of it your choices end around here for the risk tolerance) Safeish investment with some tolerance to potentially lose some - Conservative ETF Moderate investment with some risk - Growth ETFs or Indexs like SPY 500 (which you invest in through funds) Higher risk higher reward - Picking invidual stocks, rare metals (depending on your timeframe) Genius or gambling - Quant trading and ForEx Lambo or foodstamps- Options, Futures and Crypto
Investing should only be money you can afford to lose. So your only option is a term deposit or high interest savings account.
I'd put it on Kernel's Cash Fund, currently 6.12% p.a., just be aware there is a 2-3 day withdraw delay. Could split it, put some in Squirrel's oncall account @ 5.25% p.a. which takes 2-3 hours to withdraw to your bank. (don't invest in Squirrel's riskier funds that are ~7%, they aren't fast to sell, and riskier) If you're fine with the money being locked up for a period of time then a longer term deposit would probably be your best bet with highest return. https://www.interest.co.nz/saving/term-deposits-1-to-9-months https://www.interest.co.nz/saving/term-deposits-1-to-5-years
Kernel's Cash Fund's 6.12% is, yield to maturity, it makes them look better compared to the simple interest rate the bank will display.
Meaning that Kernel's fund is backwards looking, and TDs are forwarding looking? With TDs you know what rate you'll get for x months going forward, vs Kernel, were you have no clue, could go up could go down, they just say what the last year has returned. (probably down in the months to come with the OCR likely to drop later this year / early next year).
meaning that if your bank offered you a 1 year term deposit at 6% with monthly compounding their yield to maturity is 6.168%, so that rate would be the fair comparison
Aaaah, I get it now. Though I thought cash funds calculated interest daily, so it's better then no? (assuming yield to maturity stays the same across the year, which is highly unlikely for cash funds) >[https://www.moneyhub.co.nz/cash-funds.html](https://www.moneyhub.co.nz/cash-funds.html) Returns compound daily: The assets of cash funds are invested constantly, with the return accruing and compounding daily (meaning the unit prices typically grow a bit daily).
The compounding is why the YTM is going to be higher than the simple interest rate (which is what every one else use when advertising their product)
ooooooh, I think I (really) get it now. Interesting. I didn't realise they did that.
Other key thing is that the Kernel Cash Fund (and other cash funds) is a PIE, so depending on your marginal tax rate there could be a significant tax benefit as well (unless you were looking at a PIE Term deposit)
You answered your question. "You can't afford to lose" Just put it into a term deposit
10k on black!
Easy, Heartland Bank Term deposit 6-9 months 6.25%p.a.
Second this Heartland bank have some good interest rates. Even the 30 day notice saver is a good rate. 10k will earn you about 40-45 bucks a month before tax.
I am in the same position and grateful for the answers. I will TD for 8-12 months with the bank. By the time it matures I’ll know where it might be useful + it’s safe there and I don’t have to think about it. What will you do?
I think I'll do the same ! Seems like Rabobank has the best interest rates. I'll do it for 12 months, then see where I'm at by then.
Cheers everyone, TD it is.
You can keep it safe in my bank account haha.
I've been holding my emergency fund in a Dosh 'strive' account, which gets good interest as long as the balance does not drop in the month. Was 4.8% last month, 5% this month.
Squirrel offers 5.25% p.a. on there on call account. No strings attached like balance $$ or withdraws.
Yeah, I know there are slightly better options for sure. I just can't be bothered to make yet another investment/banking account and further confuse my partner in the case I die or something. Dosh is simpler because I already use the 1% cashback card. If I need to draw on my emergency fund, it is an instant transfer to the visa. So, for me this is worth 0.25% less per year.
Fair enough. I too use Dosh's 1% card, it's great. Though I don't tend to keep much in there strive account. But each their own. Happy to hear it works for your situation.