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.

[Aaron]

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.

Where do you buy your bonds? on the NZDX secondary market or do you have your eye open for new issues. Or I guess there is no restriction to NZ, there must be other bond markets.

Interesting how much harder it is to break a term deposit these days (since 2008-2009 I guess).