Retail deposit guarantee scheme to be extended
The Finance Minister has announced that the retail deposit guarantee scheme which was due to expire on 12 October 2010 will now be extended through to 31 December 2011.
Some changes to the scheme’s terms and conditions are being made which include:
* Participating institutions fees will be changed to reflect their risk profile.
* Eligible bank deposits will be covered up to a maximum $500,000 per depositor per institution and, eligible non-bank deposits to a maximum $250,000 per depositor per institution. The maximum at the moment is $1 million per depositor per institution.
* Deposit-taking institutions with a credit rating of BB or higher can apply to participate but institutions with a lower credit rating or no credit rating won’t be eligible despite being included in the current scheme.
* Collective investment schemes won’t be eligible for the new scheme.
The Government will introduce legislation to enact the changes prior to the current scheme expiring.
Call Denis if you are considering investing or renewing your existing bank or finance company deposits to get some sound advice. Either contact Denis by email denis@thorner.co.nz or on 0274 575 190.
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Thorners – servicing clients New Zealand wide
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Upper Hutt Business Excellence Awards 2009
Investment Risk Profiles – Default KiwiSaver Schemes
Are you in a Kiwisaver default scheme?
Does your risk profile match your expectations?
An element of successful investing is paying attention to your risk profile – and understanding what that means for your long-term returns. Your risk profile is about what you want your investments to achieve and your attitude to the risks involved. While this may change over the longer-term, it’s important to understand how you feel about risk before you commit to your investment.
“One of the worst things an investor can do is change their risk profile (which is linked to their investment strategy) because of short term-market moves – you can’t expect to be a high risk investor when markets are booming and a low risk investor when times are tough. The point of a risk profile, or investment strategy, is to ensure your portfolio is structured so you can look past short-term moves to get the result you need.”
By determining your risk profile – such as growth, balanced or conservative – you can understand how comfortable you are with your investment choices, by setting a strategy which is consistent with your risk tolerance.
At Thorners, all clients complete a Risk Profile so that they can gauge their appetite for the various options available and at the end, they have an understanding of why they are investing in a particular fund.
As KiwiSaver Default schemes are conservative, they may not match your investment expectations. Contact us to discuss your options.
I’m 64 – Should I take out a KiwiSaver?
Taking a quote from a prominent NZ financial adviser in last weekend papers, we would have to agree that everybody aged 64 should be in KiwiSaver before they turn 65.
So long as you join before age 65 and contribute $20 per week for five years, you will be elegible for the initial $1,000 Government kick start, the tax credit of $1,043 p.a. plus the $40 p.a. fee subsidy. After five years you will have a nest egg of $11,630 plus interest and this won’t have any effect on your National Super payment.
Where else can you get a return of 36% without any risk? We could almost go as far as recommending to borrow to top up the payments if you couldn’t quite afford the $20 per week just to get the full return.
Even those aged 55 plus should join as the return after calculating in employer contributions will overshadow ordinary investment returns every year.
Talk to us soon to get the finer details.
Click here to email Thorners or Call Us on (04) 528 8088 Click here to view our disclosure statement
