Are Bonus Bonds legit?

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Forums › Finance and wealth management › Are Bonus Bonds legit?

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dafman

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#1843361 10-Aug-2017 10:37

logo:
dafman:

msukiwi:

Term Deposits require a 31 day break delay (Notice).

Bonus Bonds do not.

No. You can typically break term deposits early if required, but may lose some of your interest in doing so.

You should talk to your bank. Even the reduced interest in the unlikely event of terminating a term deposit early may be more than what you have historically received from bonus bonds.

All the big four banks require 31 days notice since late 2014. This is to comply with Australian regulations.

The non-Australian owned banks may have different policies.

The banks have discretion to wave the 31 days. This from ANZ:

You can request an early withdrawal from your term deposit if either:

- you give us 31 days' notice, or

- You're suffering from hardship, as reasonably determined by us.

If you needed to withdraw early for a medical emergency, the example given earlier in the thread, it would likely fall within the reasonable determination for waving the 31 days.

MikeAqua

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#1843646 10-Aug-2017 16:14

I have a small amount of bonus bonds bought for me in 1975. I've never won a thing.

If $10 had been invested in an interest bearing account in 1975 .... what would it be right now.

Mike

Rikkitic

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#1843653 10-Aug-2017 16:27

MikeAqua:

I have a small amount of bonus bonds bought for me in 1975. I've never won a thing.

If $10 had been invested in an interest bearing account in 1975 .... what would it be right now.

@tdgeek ?

Plesse igmore amd axxept applogies in adbance fir anu typos

wellygary

8312 posts

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#1843654 10-Aug-2017 16:29

MikeAqua:

I have a small amount of bonus bonds bought for me in 1975. I've never won a thing.

If $10 had been invested in an interest bearing account in 1975 .... what would it be right now.

Hard to tell, but if you assume that an interest bearing account is equal to CPI inflation ( it might be a bit higher) then $10 in 1975 would be worth around $100 now.... [there was some seriously brutal inflation in NZ in the 70s and 80s)

http://www.rbnz.govt.nz/monetary-policy/inflation-calculator

dafman

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#1843678 10-Aug-2017 17:06

MikeAqua:

I have a small amount of bonus bonds bought for me in 1975. I've never won a thing.

If $10 had been invested in an interest bearing account in 1975 .... what would it be right now.

Move fast. You could withdraw it and buy a kebab. At least you'd get some satisfaction before it devalues to the equivalent of a pack of chewing gum (-;

dafman

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#1843692 10-Aug-2017 17:38

MikeAqua:

I have a small amount of bonus bonds bought for me in 1975. I've never won a thing.

If $10 had been invested in an interest bearing account in 1975 .... what would it be right now.

Ok, assuming interest compounds on a monthly basis, and you averaged 3% per annum after tax, your $10 would have grown to around $36 today.

Alternatively, if you'd invested your $10 in Apple shares, you'd be good for around $3,200.

mattwnz

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#1843725 10-Aug-2017 18:59

dafman:

MikeAqua:

I have a small amount of bonus bonds bought for me in 1975. I've never won a thing.

If $10 had been invested in an interest bearing account in 1975 .... what would it be right now.

Ok, assuming interest compounds on a monthly basis, and you averaged 3% per annum after tax, your $10 would have grown to around $36 today.

Alternatively, if you'd invested your $10 in Apple shares, you'd be good for around $3,200.

3% is incredibility low historically, and even now you can get about 3.5% per year. Only since 2007 ish with the GFC, have interest rates been this low as shown at https://tradingeconomics.com/new-zealand/deposit-interest-rate-percent-wb-data.html . Previously you could get 8% easily in a bank. So if you average say 7% over 42 years compounding monthly, you get closer to $200. Although that would exclude tax being deducted. But it still seems to beat inflation.

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dafman

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#1843747 10-Aug-2017 19:46

mattwnz:

dafman:

MikeAqua:

I have a small amount of bonus bonds bought for me in 1975. I've never won a thing.

If $10 had been invested in an interest bearing account in 1975 .... what would it be right now.

Ok, assuming interest compounds on a monthly basis, and you averaged 3% per annum after tax, your $10 would have grown to around $36 today.

Alternatively, if you'd invested your $10 in Apple shares, you'd be good for around $3,200.

3% is incredibility low historically, and even now you can get about 3.5% per year. Only since 2007 ish with the GFC, have interest rates been this low as shown at https://tradingeconomics.com/new-zealand/deposit-interest-rate-percent-wb-data.html . Previously you could get 8% easily in a bank. So if you average say 7% over 42 years compounding monthly, you get closer to $200. Although that would exclude tax being deducted. But it still seems to beat inflation.

Either scenario beats (no) bonus bonds (-;

sleemanj

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#1844777 10-Aug-2017 21:29

jonathan18:

Sigh. Those were the days. I remember getting well over 6%, on call.

---
James Sleeman
I sell lots of stuff for electronic enthusiasts...

tdgeek

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#1844781 10-Aug-2017 21:38

Rikkitic:

MikeAqua:

I have a small amount of bonus bonds bought for me in 1975. I've never won a thing.

If $10 had been invested in an interest bearing account in 1975 .... what would it be right now.

@tdgeek ?

lol back in those days interest rates were through the roof, compound will double every 5 years. Good times. 15% debentures, Marac Finance and so on

tdgeek

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#1844783 10-Aug-2017 21:43

dafman:

MikeAqua:

I have a small amount of bonus bonds bought for me in 1975. I've never won a thing.

If $10 had been invested in an interest bearing account in 1975 .... what would it be right now.

Ok, assuming interest compounds on a monthly basis, and you averaged 3% per annum after tax, your $10 would have grown to around $36 today.

Alternatively, if you'd invested your $10 in Apple shares, you'd be good for around $3,200.

3%, talk 15%, and thats interest on debentures, brand name companies. Annual review, talk 10% minimum. Buy a house, ouch high teens interest, but give it 5 years of pay rises. Yes, baby boom time. Not their fault.

minimoke

750 posts

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#1844785 10-Aug-2017 21:44

In the past I've had over $100k in BB as part of an overall short term cash management strategy. In the end prizes were worth about what I would have got had I had the money in an interest bearing cash account.

Recently I have had to cash out around $20k. When i look at the returns same thing applies - about the same as the cash rate. Took a week for funds to be returned to bank account so not quite as liquid as cash in bank but better than term deposit.

I wouldn't recommend them as a serious investment

Oblivian

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#1844786 10-Aug-2017 21:45

I have super high saving restraint.

And was living off my interest at 8% on an ANZ oncall. Paid the CC in full each month and had spare.

When I realised it had crashed to 1.2% I went to the counter and said, I should probably invest this somewhere. Rightfully so, they agreed. Since then It's been spread far and wide with the max getting about 2.5 if not in term, while those other hopeless 'savings' accounts get .2. Not even 1%

One of the temp holders.. $3.50 a month on 40K. Whopee

You want good returns, seems the only way is to buy a house and rent it for 6-10%. Ironic huh. Tell us theres low stocks, yet no saving incentives anymore other than property or apparently high rate but not full term to get said rate term deposits if you can do so.

Oblivian

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#1855569 31-Aug-2017 00:45

Well dang.

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11913177

dafman

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#1855624 31-Aug-2017 08:37

Oblivian: Well dang.

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11913177

Reads like a sponsored advertisement.

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