Everyone should look into term deposits, one writer suggests.
Term deposits should become a part of people's lives, according to one industry expert.
Annette Sampson, writing for Business Day, said there are a lot of financial planners who are using the products to ensure there is a regular source of income in portfolios.
She added: "Term deposits have the advantages of simplicity, a known income stream and security of capital."
However, there are limitations as they fail to offer exposure to capital gains available from debt markets so Ms Sampson advises that people look at income funds or fixed interest funds, however there are risks.
Two of the biggest oppositions to these products include an
interest rate and
Aussie credit gamble, because if the rates increase then the value of existing fixed-interest investments could decrease.
This news comes after the Reserve Bank of Australia raised the official cash rate earlier this month from four per cent to 4.25 per cent, which led to banks increasing their interest rates.
By Joe Letts
