In brief
Fix to thrive
RateCity says two-year fixed interest-rate home loans are sufficiently below variable rates that those who fix are likely to come out ahead, even if the cash rate was cut further. RateCity finds the big four banks' lowest two-year fixed rate is 4.99 per cent compared with their lowest variable rate of 5.67 per cent.
INVESTMENT
Increased investor appeal
Australians are increasingly looking to invest in the US, according to Andrew Formica, chief executive of fund manager Henderson Global Investors. "The Americans have always shown themselves to have the ability to grow and reinvent themselves," he says.
SAVINGS
Deposit with bonus return
Westpac-owned RAMS has bucked the trend of falling deposit rates and set its online account at a market-leading 5.01 per cent, which includes a 0.9 per cent bonus. But there's a catch: you must deposit $200 a month and leave it there.
RISK
Swap with caution
Beware credit default swaps. Half of the 2000 financial experts who took part in a survey named credit default swaps on government bonds in emerging markets as the world's "most dangerous" financial product.
Frequently Asked Questions about this Article…
According to RateCity, two-year fixed home loans are currently low enough that borrowers who fix are likely to come out ahead. RateCity found the big four banks' lowest two-year fixed rate at 4.99% versus their lowest variable rate of 5.67%, and says fixers may still benefit even if the cash rate is cut further.
RateCity reports the big four banks' lowest two-year fixed rate is 4.99% while their lowest variable rate is 5.67%, creating a noticeable spread that may favour fixing for some borrowers.
Andrew Formica, chief executive of fund manager Henderson Global Investors, says Australians are increasingly seeking US investments because American companies have repeatedly shown the ability to grow and reinvent themselves, making the US appealing to investors.
Westpac-owned RAMS is offering a market-leading online account rate of 5.01%, which includes a 0.9% bonus. The catch is you must deposit $200 a month and leave it there to earn the advertised rate.
RAMS' 5.01% rate is attractive, but it comes with a condition: you need to deposit $200 each month and keep it in the account. That requirement means it's not a simple automatically higher rate for existing balances—make sure you can meet the monthly deposit rule.
A survey of 2,000 financial experts named credit default swaps on government bonds in emerging markets as the world's 'most dangerous' financial product. The article advises caution around credit default swaps.
The concern is significant: half of the 2,000 financial experts surveyed singled out credit default swaps on emerging-market government bonds as the most dangerous financial product, highlighting broad industry worry.
The article suggests two practical points: consider two-year fixed home loans given the current rate gap identified by RateCity (4.99% fixed vs 5.67% variable), and weigh high-rate savings offers like RAMS' 5.01% account while noting deposit conditions. Use these facts to compare potential mortgage savings against attainable deposit account returns before deciding.
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