What a difference (less than) a couple of years makes. Go back to early 2022 when - sorry for those who are triggered by this - the Reserve Bank's official cash rate was still 0.1%. You couldn't get an at-call bank account that actually paid interest (without onerous terms and conditions) for love nor money. At the time, analysts were throwing around the acronym TINA 'There Is No Alternative' than to be in shares.
Then, everything changed. With a sudden rush, the cash rate started to climb. And climb. And climb.
So - somewhat belatedly - did returns on cash in the bank. Not only that but, as we saw when the banks last reported their earnings, competition is heating up, which - hurts bank margins but is wonderful for depositors and slightly cushions the blow for borrowers.
It's also increasingly led people to wonder whether they need shares as part of their income portfolio. Cash in the bank is about as safe as it gets (at least the proportion that's governmentguaranteed), and if you can get a decent term deposit rate, why bother taking a risk with shares?
This story is from the December/January 2023 edition of Money Magazine Australia.
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This story is from the December/January 2023 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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