KEY POINTS:
What is it called and what sort of savings product is it?
The ANZ Term Fund.
Who is the company behind it?
The fund is promoted by ANZ Bank and the actual investments are managed by ANZ's wholly-owned subsidiary UDC Finance.
Who is the target market?
The Term Fund, being PIE compliant, is targeted at people on tax rates of more than 33%.
What return does it offer?
The fund's advertised rate is 6.85 per cent, however the effective rate for 33 per cent and 39 per cent taxpayers is 7.30 per cent and 8.02 per cent respectively.
When was it launched?
The fund was launched on October 21, the same day as ANZ's new Call Fund.
What other products is it like or is it competing with?
ANZ is the first of the big banks to launch a PIE compliant PIE fund. The only others with such term funds are Kiwibank and UDC.
Is it long term, short term or medium term?
This fund has a six month term.
What is the unique selling point?
The tax benefits are the biggest feature.
How strong a stomach do you need for it?
Even someone with the weakest of stomachs will be comfortable with this. While the fund itself doesn't have a rating, ANZ National has an AA Standard and Poor's rating.
What's the hitch?
There aren't any major hitches with this fund. The money is invested into ANZ deposits, and a new term fund is launched once a month. Money invested before the fund's actual launch date is held in ANZ's PIE-compliant cash fund. Money in term fund is essentially locked in for the full term and the minimum investment is $5,000.
