Term deposits - alternative strategies
Term deposit rates are falling. But there are alternatives available.
As term deposit rates fall it’s important to be aware of your options. An investment adviser can talk you through the benefits and relative risk of alternative strategies, and how those strategies can help you meet your goals.
This webpage does not contain financial advice - for financial advice, please speak to a Forsyth Barr Investment Adviser.
They will discuss your financial situation and goals, and explain the risks associated with any potential investment.
Falling interest rates
In recent years, term deposits have been a dependable choice for many investors, offering competitive returns with minimal risk. These rates provided a reliable source of income, making them an attractive option if you were seeking stable returns. But as we approach 2025, market conditions are shifting. Term deposit rates have fallen - and are forecast to fall further - raising concerns if you are relying on them to grow your wealth or maintain your current income. In this environment, it’s important to consider alternative strategies that can deliver you both stability and the potential for higher returns.
A diversified portfolio
Developing a diversified portfolio tailored to your financial goals requires a thoughtful, long-term plan. This is where Forsyth Barr’s expert advice is invaluable. A financial adviser can assess your risk tolerance, income needs, and time horizon to create a strategy specifically for you. Your adviser will help you identify opportunities across different asset classes, ensuring your portfolio remains flexible and adaptable as markets evolve. Expert advice is particularly important in a low-interest rate environment, as making the most of your investments often involves exploring options beyond the traditional choices like term deposits.
The importance of advice
One of the most effective alternatives to consider is a diversified investment portfolio. Unlike term deposits, which focus solely on interest rates for returns, a diversified portfolio spreads investments across asset classes such as shares (New Zealand and International), bonds and property. This approach helps you balance risk and reward by tapping into different types of returns - shares offer growth potential, bonds provide stability and property can deliver regular income. Diversification ensures that no single market fluctuation unduly impacts your overall wealth, making it a resilient strategy as market conditions change.
Alternative investment strategies
As interest rates continue to decline, relying solely on term deposits to grow wealth or generate income is unlikely to be sufficient. A diversified portfolio, developed in partnership with a Forsyth Barr investment adviser, offers a compelling alternative that balances security with the potential for growth. By taking a proactive approach and exploring diversified investments, you can create a resilient investment strategy designed to weather changing economic conditions and support your long-term goals.
Specific investments
In responding to falling interest rates, there are also a range of individual investment alternatives that may deliver for you. Each delivers different benefits (and degrees of risk and opportunity) to balance.
Become a client
Speak to an adviser near you
Find out more about our Term Deposit alternatives, speak to one of our friendly, experienced investment advisers. They will take the time to understand what you want to achieve, and work out a plan that is right for you