Westpac has moved to shore up a position in the annuity-like product market, today launching a flexible investment product targeting self-managed superannuation funds, according to The Australian.
The product, which returns both principal and interest in its term, lays the ground work for a bank assault on the market, which is dominated by Challenger, the newspaper said.
Life insurance companies are the only groups that can legally issue annuities so Westpac has structured its new product as a deposit, which will also work to raise more deposit funds for the bank, according to The Australian.
The minimum investment is $50,000, with different terms of up to 15 years and a choice of payment options including indexed returns.
Westpac claims its version, which has been approved for use as a tax-free pension, offers more flexibility than a similar offer from NAB.