Internet Banking
Contact us
Facebook
Security
Investing in a low interest rate environment
Investing in a low interest rate environment can be a challenge for many of us. Previously, you may not have had to think twice before investing in term deposits and low-risk bonds. In the current environment, however, returns from some term deposits may not even stay up to pace with inflation. So, what are some key considerations when it comes to deciding what to do with your money?
Risk appetite
This can vary for each person and depends on personal life circumstances, as well as the willingness and ability to manage risk. In a low interest rate environment, investments that offer potential returns that are higher than current interest rates typically come with a greater level of risk.
If you keep your money in savings accounts and term deposits, it could we worth investing a portion of it elsewhere, due to potentially getting a better return in the current environment. This is dependent on your risk appetite, among other factors.
Your current situation
Where to place your money may be an obvious choice if you have debt that you’re paying off, like a credit card, car loan or home loan. In general, loan interest rates are higher than savings and term deposit interest rates. This is where the low interest rate environment is a positive and presents an ideal opportunity to make extra repayments in order to reduce your overall debt.
Review your super
Before deciding where and how much money to invest, it may be worthwhile reviewing how your super is currently invested. Most super funds have a range of investment options to choose from. Reviewing your super allows you to check that it still meets your needs and expectations for returns.
Your future goals
Where you decide to invest your money largely depends on your financial goals. Your goals may be short-term and involve saving for something specific such as a car, holiday or eliminating debt. Examples of long-term goals are saving for retirement and 5+ year investments.
If you’re looking for information about where to invest, we can help. Consider getting financial advice from our Senior Financial Planners by visiting Financial Planning, calling 1300 654 193 or email support@snowstarcu.com.
This information does not take into account your objectives, financial situation or needs. Therefore you should firstly consider the appropriateness of this information and refer to the Terms and Conditions and Product Disclosure Statement (PDS) before acquiring a product. These documents are available by contacting us on LiveChat.
