Beginners

[blackcap]

My bank has 1% interest rate Penalty deduction calculated on the interest already earned. When I asked the bank made it clear that this penalty could change. Plus there is a long wait - as stoploss said - to get the funds - 30 odd days.

Some bonds are not particularly liquid so there could be a wait until they can be sold. However most of my bonds/notes are reasonably liquid.

All things considered I think there is less hassle, less waiting and less expense to sell bonds compared with breaking a term deposit. I think it was after the financial crunch, they tightened the rules on breaking bank term deposits.

Thanks, that makes sense. I guess they don't want a liquidity crunch if everyone looks to liquidate at the same time.

Bonds are a lot more flexible, I have had/have both, but would not mind a term deposit type instrument with a bank that is treated more like a bond. Ie the bank quotes the price on a daily basis determined by what their yield curve looks like. Could be a product that people would like to invest in.

[GTM 3442]

I buy bonds and I do my best to ladder them.

It's not always possible to do this, so I tend to use bank term deposits to fill in the missing rungs on the ladder.