(23 April 2012 – New Zealand) The Global Financial Crisis sent cautious consumers straight into their bank manager’s ready and waiting arms, resulting in deposits doubling in the last eight years in New Zealand.With more than NZ$100 billion (A$78.8 billion) stashed away in the bank, according to BusinessDay, New Zealanders have now more than doubled their deposits in the space of eight years.
While the 4 to 5 percent on offer for these funds is slightly uninspiring for consumers used to the previously more appealing rates of yesteryear, it’s “quite a good rate for a practically no-risk investment” Greg Moyle, of New Zealand Financial Planning noted.
Mr Moyle said that under normal circumstances consumers expect not to get a real return from money in the bank- they expect to get zero, and generally it’s negative.
Spicers financial adviser, Jeff Mathews, told BusinessDay that the New Zealand sharemarket has averaged an annual 3 percent negative return over the last five years.
Mr Matthews doesn’t see bank deposits as a long term investment solution, but he concedes that they’ve piped the NZX recently, adding that money in the bank would have beaten it in a five-year period, but this has been an exceptional period.