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Send your questions to susan.edmunds@rnz.co.nz
I am in my early 70s and have no debt, some savings in the bank and a freehold house in Whanganui.
I am currently renting in Karori, Wellington where I have returned with a plan to work.
Where do I gain the best interest and keep what money I have safe?
It is currently in two serious saver accounts with some going into a term deposit but the interest is only a bit over 4 percent.
My question is - where can I maximise the rate of interest paid without being scammed?
Falling interest rates are good news for people with home loans, but I know they can be tough on people like you, supplementing your income with money in the bank.
I checked in with Dean Anderson, founder of Kernel Wealth, about your options.
He said they would broadly range from on-call savings accounts through to managed funds.
On-call bank savings accounts have lower interest rates but there are few restrictions about how you access your money.
These rates could drop if the official cash rate falls further, as it is expected to.
In some cases, you might be able to get a bit extra in interest from the bank if you meet certain criteria, such as not making withdrawals or meeting contribution requirements.
Term deposits will usually give you a better rate - at the moment you can get more than 4 percent if you lock in for two years or more. The drawback is that your capital is locked away for that period of time.
You could look at a cash fund from a bank or other fund managers. These can offer higher yields without the requirement to be locked in.
"They can hold short term debt instruments, so the yield can fluctuate slightly. As it isn't a set interest rate, it can be slightly confusing for investors to get their head around," Anderson said.
Beyond that, you could talk to a fund manager about putting your money into a slighlty riskier fund. Anderson said bond funds and conservative funds would be more stable than those invested in equities, but you'd still need to keep in mind that they could fall in value.
"A good example of that was during Covid, when some conservative funds actually fell in value by 10 percent or 12 percent."
That's a fairly extreme situation and generally conservative and bond funds should move less than riskier ones. We've seen that with the market volatility recently.
If you're worried about avoiding scams, your best bet is to stick with financial services providers who are registered in New Zealand. (You can check the Financial Service Providers Register.) There should be ways you can get more interest or better returns generally within the banks and other financial institutions you already deal with, which could give you more comfort.
Make sure you know who you're dealing with and don't respond to investment offers from people who cold call you or approach you out of the blue.
I want to apply for a home loan but I have bad credit. Am I going to be out of luck?
Not necessarily. While it's helpful to have good credit when you're applying for a home loan, bad credit doesn't always mean you've got no chance.
Jeremy Andrews, a mortgage adviser with Key Mortgages, said it would make a big difference if you could explain how the bad credit happened.
"I often recommend clients who think or advise they might not have good credit history, to check their own profile via clearscore.com - the service is free, requires a passport or drivers licence to create an account, and users can do 'soft checks' to see how their credit score is tracking at any time without impacting their credit score in the way full official credit checks can.
"If there's strong equity, such as at least 20 percent for an owner occupied property, then an indicative score of 500 to 600-plus may well be worth approaching a main bank. If lower than this, then getting a good explanation of what's happened previously and why it won't happen again, plus at least three months of clean bank account conduct - no unarranged overdrafts, missed or bounced payments, and ideally savings or equity increasing too - [will help]."
He said if your score is very low you could consider a non-bank lender.
Some people choose to take a loan this way and then move to a main bank when their credit improves.
Non-bank lending is usually more expensive and there might also be some other upfront costs, instead of the cashback incentive you might get from a bank.
"We often see cases where a small bill such as for utilities was not paid amongst moving house, but once the client found out and paid it promptly, then this explanation is also looked at favourably by lenders.
"Finance related bad debts are viewed very seriously and clients putting their head in the sand and hoping outstanding bills would go away, would have a harder time getting approved and need to look at higher cost options."
Glen Mcleod, head of Link Advisory, said a default with another financail institution would usually mean a borrower had to go to a second-tier lender.
Something smaller could be acceptable to a bank if the rest of the application was strong.
"In the current lending environment, defaults or any signs of poor credit conduct can be a significant barrier.
"To access creditworthiness lenders typically consider credit history and any defaults, repayment conduct on current liabilities, income stability and total debt exposure."
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