Hi guys,
I know this is not exactly a business discussion but I wish to seek advice of ppl here. I'm current facing 2 investment vehicles in the short run (2 years till I grad and get out of aus and go back to sg) and from my understanding, it is recommended to invest in vehicles such as cash and fixed deposit over, say, shares in the short run as it's less volatile. The 2 term deposits are:
1. Bank 1: variable rate of an average 7.9% pa for the first month. After which, it falls to an average of 7.4% pa. Interest rates are compounded monthly. No minimum deposit required. With overdraft, interest will be debited from the account
2. Bank 2: fixed rate of 6.25%, 6.5%, 6.65% for deposit kept for 3, 6 and 12 months respectively. Interest is credited to the account every year. Minimum deposit of $500 is required. No account, maintenance, exit or entry fees
Now, looking at both, at first I would think bank 1's offer is better at 7.9% (I only intend to keep it there for 1 year after which I'm putting the money somewhere else which requires a higher minimum deposit) but I like the idea of low volatility of a fixed rate.
However, looking closer, for bank 1, interest is credited monthly while that for bank 2 annually and for that I actually prefer bank 1's offer. Furthermore, bank 1 require no minimum deposit, which makes it cheaper for me to open the account.
So I would like to seek the advice of readers here. Which would be a better investment. Might be a no brainer for some ppl but pls do pardon my inexperience. Still learning
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