If after tax returns from term deposits are at risk of more rate cuts and dip below the inflation rate, what are the alternatives? Your view?

If after tax returns from term deposits are at risk of more rate cuts and dip below the inflation rate, what are the alternatives? Your view?

This is the shortest article we have ever written. It is here to invite feedback on what are the strengths and weaknesses of the alternatives to a term deposit investment.

Term Deposit interest rates are low. And they are about to go even lower.

So, what alternatives are there?

Suggest additions to this list (which is not in any priority). And rate the risks of each of them in the Comment thread below.

- KiwiSaver

- moneymarket funds

- contributory mortgage funds

- shares (dividend shares)

- Hatch, or other international shares

- alternative assets

- investment funds / trusts

- residential investment property ownership

- commercial property ownership

- property or farm syndications

- forestry blocks (carbon farming)

- bond funds

- Government bonds

- artworks

- Bonus Bonds (H/T Lanthanide)

- Peer to peer lending (H/T davef)

- PIE funds (H/T John TRZ)

- Lotto / TAB / casino

- foreign currency accounts

- a small business / franchise

- Gold and/or silver

- bitcoin (and/or other crypos)

- under the mattress

- don't save. Just spend it on consumption now (and let future taxpayers fund benefits in your retirement)

- [ insert your option here ]

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Buy a house and accommodate tenants who need a roof over their head?

Wash your mouth out with soap!

Build a house Yvil. Buying is just playing deckchairs.

And what happens to the people who were living in that house before you bought it?

With the US-China still growling at one another & the planet headed for less global trade in the future, not more, I think not losing your savings is a priority. Are banks safe? Probably, but not full-proof.
Ironically Trumps tariff actions have the same effect as the Greenies would want, a reduction in global trade meaning less ship movements, meaning less fuel usage by millions of tonnes per annum. Now if we can just get travelers to stop flying, we could make another huge saving.

Even "full-proof" is not foolproof.

There is an argument for keeping it physical - something tangible. And if it produces energy, you have to be on a winner. A container-load of PV panels, dark-stored, may well be the best investment you can make.

In a powering-down world, the 'worth' of digital 'investments' is increasingly questionable - all those baby-boomers with 401k's in the 'States - reckon they're in for disappointment. And if trade seizes up....

Eh, the solar panels aren't likely to go up in value in the short-medium term, as newer technologies and larger economies of scale will continue to drive the prices down for the next 5-10 years at least.

Lanthanide - you miss the point. Energy underwrites money, and money has over-bet on the future. David is pointing to the problem - nothing to bet on. Which means it hasn't long to go as a system. It's been on life-support for 10 years, zero and below interest-rates, no QE worked (because it wasn't the problem). So you have to expect the trading/financial system to break down. And you know 'technologies' are a diminishing returns scenario, of course? I'm doing the panel thing now. If we have 5-10 years, fine. But I'm not betting on it. The moment the masses realise their bets are forfeit, all bets are off.

I'm fairly confident that BAU will carry on for another decade or so.

Watched a clip from Australia on the solar industry over there, and the number of solar panels that are failing after only a handful of years is a real problem, plenty of shonky product out there. https://www.youtube.com/watch?v=10Gnf-wvF7A

Yes I bought one but its only 50W and a non critical application for $70 so what else would you expect ? Cheap ? for sure and as a bonus there is a long black hair trapped on the reverse side under the clear laminate ! would I expect it to last 25 years ? no.

Actually Lanthanide, you've probably got the best idea to invest in sustainable technology, that will most likely produce a better yield for the future. Problem is looking through the above article investment list. Most of those products are interlinked and have been made unreliable and unsustainable due to being over exploited by the under class and dodgy dealing. Sure our government has tried to reduce their impact recently but it's a slow change to let those market return to sustainable levels. So keep this in mind that traditional class values have gone in the New World, there's only "The Haves, the Have Not and the Under Class". Don't invest in products that have been heavily invested by the Under Class; Basically money launders and their facilitators (And it's not just the property market).

Great question David, I don't believe there is one answer (although there will be many opinions). Each person is different, some are prepared to take a bigger risk for a larger return and take charge of their own investment (business owner, share trader, property investor), others are much more conservative and lazier and want others to invest their money for them for a lower return (various form of deposit investors).

The answer is simple.
Retired Poppy has been a great advocate of term deposits over the past few years or so - just ask him what he is doing.

printer8, telling another lie? I've only been on here two years - lol! Owing to the deteriorating climate, I'm in TD's at present @4.26% (paid monthly and reinvested into Kiwisaver). I have 3-1/2 years to run at this rate. Up till Jan 2018, I was mostly in high risk managed funds, no complaints for what that delivered. Going forward, unlike your good self, my pathway doesn't involve paying off loads of dead money (interest-insurance-maintenance) on assets that will only decline in value. As a side note, why should FHB's give greedy speculators a dignified exit. What a waist of hard saved money! The smart and patient savers wait for what inevitably follows long periods of greed - (FEAR)

What's your (rear view mirror) orientated outlook for success? We already know that you're recommending FHB's buy now, take out 30-year mortgages and raid their Kiwisaver accounts regardless of the darkening outlook. This short sighted and irresponsable recommendation is likely to come back to haunt you. How much have Auckland house prices fallen in the 2-years I've been a member? My message to FHB's has added value, whereas yours has added something else entirely.

Sorry RP
You just seem to have been around for a long, long while.
I enjoy your comments!

"I enjoy your comments"

Nah, be honest with yourself. It's obvious my comments are irking both yourself and Yvil (^_-)

Yvil, oh - okay, the owners of 80% of domestic deposits currently held by banks are lazy are they? How on earth did all these lazy people come to be owners of all this money? Perhaps it's more plausible your stuck in a financial funk entirely of your own making???

Another tantrum RP? Relax your TD's will be ok, maybe, hopefully…

LOL!, it's good to see both yourself and printer8 have taken my comments more seriously of late. There are certainly sound reasons for doing this.

If there is a haircut in my future, I can rest easy knowing I'm still financially solvent. In such crazy times, property is notoriously illiquid cause no-one wants it. There will always be food on our table. I've yet to witness someone eat a house...

"it's good to see both yourself and printer8 have taken my comments more seriously"

Delusional: characterized by or holding idiosyncratic beliefs or impressions that are contradicted by reality or rational argument, typically as a symptom of mental disorder

.... (sigh) if only you could say a sad and shallow individual had just hacked your interest.co login. Like printer8 you're just needing to be honest with yourself.

I believe over-materialistic individuals are always unsatisfied with their lot. They consistently seek out ways to undermine the fruits others have rightfully earned through hard work.

Cheer up sunshine (^o^)

I saw a chart the other day that showed a 5% allocation to bitcoin and 95% cash provided a better return and lower risk than the S&P 500.

Depends entirely when you sell the bitcoin.

... and whether or not the place where you have deposited your Bitcoins has been hacked , and your coins removed sometime of the past month without you being aware of the theft ...

By now you might have heard the phrase "not your keys, not your bitcoin." You should never entrust your bitcoin to a third party for longer than it takes to conduct a buy/sell transaction. If you store bitcoin on an exchange, you don't really own any bitcoin - all you own is a claim on the bitcoin held by the exchange. It's no different than when you deposit cash with a bank - you become an unsecured creditor of the bank. Store your own bitcoin private keys and with some simple security precautions there's no way it can be hacked. https://youtu.be/vt-zXEsJ61U

Actually, it was a 1% allocation to bitcoin and 99% cash that beat the S&P500 over the last ten years. Better in every measure, e.g. higher return, lower risk, better RAROC (ratio of risk adjusted return to economic capital). This includes the three big (80%) crashes in the price of bitcoin in 2011, 2014 and 2017. With a 1% allocation to bitcoin, your maximum loss in any given year can't exceed 1% (assuming bitcoin went to zero), whereas the S&P 500 lost 6% in 2018. Nevermind if we saw a repeat of 2002 or 2008 (stocks down 40%).

"Actually, it was a 1% allocation to bitcoin and 99% cash that beat the S&P500 over the last ten years. "

Well duh, because when bitcoin was first being traded it was going for less than 1 cent each.

I think you're missing my main point, which is about capital risk management. You can allocate the bulk of your net worth to low risk investments and a tiny percentage to high risk/(potentially) high reward investments and because of the tiny allocation to the high risk assets, your potential losses are tiny while your potential gains can be huge.

This is known as the Barbell Strategy. Picture your investment portfolio as a barbell: two big lumps, separated by a narrow bar. On one side, there’s a basket of extremely safe investments. On the other side, there’s a basket of extremely risky speculative plays. The weight is distributed between two extremes, with almost nothing in the middle. Instead of having a mildly conservative or aggressive investment strategy, you’re both hyper-conservative and hyper-aggressive at the same time. This approach limits your downside risk — the total amount you can lose — while giving you exposure to potentially unlimited upside.

The two sides of the barbell don’t have to be equally weighted. You could put 85-90% of your money in ultra-safe investments, like cash. The remaining 10-15% should be placed in a whole lot of small, speculative bets — basically, the highest-risk, highest-reward investments possible.

Let’s say a black swan event comes along and wipes out the market. The very worst-case scenario sees you take a haircut of 10 to 15 per cent of your wealth, while everyone else loses their shirts. On the other side of the barbell, if one of your bets happens to pay off, you stand to make enormous gains, while everyone else misses out completely.

Being in the middle gives the illusion of safety, but it’s actually the worst of both worlds: you’re still vulnerable to being wiped out by a black swan, while also having no opportunity to tap into the stratospheric gains that swirl out of the same chaos.

Problem is Gold Kiwi is what is the hyper safe investment. Perhaps that was a thing once - but no longer.
I thought Chaston was being unusually playful with his article. But as I read the responses here I see it's lifting the lid on serious stuff.

Lanthanide, I recently read an article that claimed that there were only 3 months in the entire life time of bitcoin you would have lost money. That was right around the big bubble end 2017/2018. Apologies, can't find the article right now, but the point is that as an asset class it has been performing very well.

Great question and article.
After a decade of increasing house properties and equity markets, with every man and his dog who owned property or invested in a growth investment fund with exposure to equities experienced a significant increase in value of assets. Term deposits - by current and likely future rates - also provided reasonable returns. So those in these categories did not have to do much thinking at all.
We are now experiencing a new economic landscape where there is uncertainty in housing and global volatility in international equity markets. In the past, under such situations, term deposits rates tended to be high and a safe haven for cash.
So after a decade of great times and little need for deep thinking, investors are now really at a loss.

Note: those in the early part of the property boom - 2012 to 2014 - will be very smug as they have experienced rapidly increasing equity and falling mortgage rates. They will be doing nothing but sitting tight and smiling.
As for those who thought that they had saved for a good retirement, they certainly will be feeling the ill winds of the current situation and may not be having the quality of life that they expected. I expect that those who own rental properties will be sitting tight knowing that there are too many viable options and continue to be landlords albeit reluctantly.
Those cash rich will be tossing up whether to either accept a cut in income or start eating into their capital.
For most retirees, for investment in many of things mooted in the article, the window of opportunity is too short.

Very good comment printer8 (as we have become accustomed to)

I could feel smug about buying in 2014, but I'm looking long term.

Fresh Water. But the govt will need to stop can kicking.

Dividend paying shares in Aussie miners?

Bonus bonds!

Yes, most definetly.
Put a whole week's wage into bonus bonds when I first started working - that was 50 years ago.
You know what; I haven't had a win, but 50 years later I do still have ALL of that whole week's wage - $40.
Rock solid!

Better still. Use the "barbell approach" as advocated by Gold Kiwi. Buy a lotto ticket as your high return high component. Happyness.

Who cares where you put that money next, just take it out of term deposits - do it now. Maybe the banks/RBNZ will pay attention, maybe not. More seriously, you should probably reinvest widely across the rest of whatever investments you have now. You do have a diversified portfolio, don't you?

Moving away from term deposits leads to riskier assets in many cases. This is my list in approximate order of ROI highest to lowest.

FNZ - Top 50 NZX index annualised return averaged over 3 years is 12.38% pa including dividend reinvesting. Gross dividends are just under 4%
DIV - Dividend fund has less capital gains but has a 5.38% dividend payout
Avoid Australian dividends as they are double taxed which gives poor returns.

There are a variety of funds by Vanguard, Blackrock, etc on the ASX that provide options but again it's best to invest in growth rather than dividends. There are also funds on both NZX and ASX that are denominated in other currencies which may act as a hedge against exchange rate changes.

Paying off your mortgage. The return on paying off a mortgage is predictable. In fact 3.89% net return on interest saved is equivalent to receiving 5.8% gross interest. It's not the best performer but it reduces risk and has a compounding effect on the mortgage.

Peer to peer lending - 11-12% but is likely to be risky is job losses start and this would decrease returns.

NZB - Bond fund of NZ companies where the return is 3.87%. Better than a term deposit but depends on the companies not going bust.
NZC - Cash fund pays 2.99% so there's still some return but the upside is lot less than other options.

Gold, silver or platinum will give a better return that a term deposit allowing for inflation but has exchange rate risks. Silver is at a low price after market manipulation, but it's also terrible for holding wealth on a large scale as you may need to store a large volume of the metal. It's about 100 ounces of silver to 1 of gold for the same value. Storage costs and security or insurance need to be considered as ongoing expenses. Precious metals essentially have an expense rather than generating income like other investments.

Cash returns 0% and degrades with inflation. It's useful in the event of a bank run, financial system collapse or interest rates going negative. Perhaps having enough precious metals and cash to survive a disaster (or to pay for a plane ticket) would be sensible.

Perhaps a combination of the above as a part of a portfolio would make more sense.

Owning residential or commercial property should be treated as a business rather than an investment. With exception of REITs and similar instruments of course. Running a business takes a lot more time than a comparable term deposit.

Indeed dictator and a business done well will return significantly more than any investment you mention in your previous post but, yes, it will take much more time. Still it allows you to be in charge of your own future instead of relying on others and hoping they will do well with your money

Running a business and investing in the above are not mutually exclusive. Why not have both?

If you consider owning a business and investing in property then yes indeed, I actually do both.
But running your own business and investing passively (term deposit or funds) is a lot less likely because you would do much, much better reinvesting your money into your own business rather than putting your money into a td or fund

You should never buy shares because 33 years ago in 1987 there was a terrible crash that resulted in many people losing their retirement savings.

I'm sure all the chicken littles are heavily investing in oil futures. Healthcare etf? "The average couple retiring in 2019 at age 65 will need $285,000 to cover health care and medical costs in retirement, according to an annual estimate by Fidelity, released today. ...Notably, the estimate does not include long-term care costs such as nursing home or assisted living expenses."

KiwiSaver Growth funds
The Central Bank model has removed most or all of the risk and no KiwiSaver provider will ever be allowed to collapse.
Get out there and make hay while the sun shines, to use an agricultural proverb.

Start young, diversify. Do not always agree with experts If encumbered or blessed by children encourage the sharing and exchange of business/ financial material. As corny or cliched as it seems ,invest in ones health, no point accumulating it if you cannot enjoy it.

Well said Cowpat!

Plant a forest - get the fuel user to pay for planting and for land rental the first ten years. All you need is a farm to qualify for your free forest. The whole silly scam will have blown over like a Y2k bug by the time it comes to harvest the trees.

"The United States, and other nations like Australia spent more than $300 billion getting ready for the big changeover. Russia, Italy, and South Korea spent practically nothing. And in every county, nothing happened, no matter how much the country had spent."

If term deposits were to go go down to zero, deflation would likely be on the menu. Equities would be tanking as would house prices and rents. Unemployment??. TD's would still deliver a positive return. We would indeed be living in precarious times if term deposits did go negative. The risk is people would withdraw savings en-mass. Where does that leave capital buffers when they can't attract deposits? That's why I think it's highly unlikely. It's worth noting that in May 1931 the Federal Reserve's federal funds rate bottomed out at 1.5%. Currently the Fed has paused at 2.5% as things starting keeling over. We are living in dangerous (bufferless) times. Get ready for negative interest rates as explained here; https://www.forbes.com/sites/pedrodacosta/2019/02/21/get-ready-for-negat...

Psssst I know of a cheap dairy farm. Anyone?? ANYONE??

"The risk is people would withdraw savings en-mass."

But that is not the experience in other countries that have effective zero interest rates on term deposits. In fact, term deposit balances in Europe and the US where returns are close to zero for these products, are actually rising.

Perhaps savers value the parking utility ? I don't know, but I do know it doesn't result in savings flight.

Thanks David. What if term deposits were to go into negative territory? I would have thought that unlike safe haven Switzerland, for others such as NZ and Australia, it would be unchartered territory (unintended consequences). Mum and Dad savers might take exception to paying the bank to hold their money.

Re: "The risk is people would withdraw savings en-mass." That depends if there's an scheme in place to protect savings up to a certain amount, I don't think we have that here in NZ? Anyone hear about a UK Building Society called Northern Rock? Here's how things played out during the GFC when they started to get in to trouble, nearing collapse and had to be rescued. Before the the UK had a savers deposits guarantee scheme.
Quote from The Guardian news article: Monday September 17 2007 - Northern Rock shares slide further, with the stock opening 31% lower after tumbling by a similar amount in the immediate wake of the crisis. Meanwhile, savers continue to queue at Northern Rock branches across the UK. Darling intervenes, pledging that the government will guarantee all deposits lodged with Northern Rock.

Thursday September 20

The Bank of England makes a dramatic U-turn in its handling of the credit crisis by agreeing to pump at least £10bn into longer-term money markets.

Monday October 1

The government announces a new regime guaranteeing 100% of an individual's bank and building society savings up to 35,000.

Tuesday October 9

A guarantee put in place to protect Northern Rock customers is extended to cover all new deposits.
The Guardian News Article: https://www.theguardian.com/business/2008/mar/26/northernrock

Now question is; if the same happened here would the our Government bail out the banks and savers deposits?

Chaston's very short article is very much on the nail.
Term deposits are indeed very unexciting. But we are there because nothing else looks interesting. So, what to do?

Think about what makes you happy, then make a business out of it, it will surely be interesting and you won't mind working on it, also you will be very likely to be successful, make lots of money and be happy, a great trifecta

The 3.15% you can get from ANZ nz doesnt look too bad compared with ANZ au. The best you can get in aussie is 2% for 5 years. Maybe take the 3.15 while you still can?

Or maybe go for a Rabobank 5 year Term Deposit @ 3.6% (interest at maturity) or 3.57% (interest paid 6-monthly) and lock that in before TD rates drop any lower?

Has a fully diversified 60/40 (or whatever you choose) asset allocation gone out of fashion? Failing that, there's always the doggies.

Most people commenting believe in 100% residential housing.

Profits from portfolio rebalancing or 60% shares 40% bonds are never discussed. The Kiwi way is a one way bet on a get rich scheme.

Buy direct shares or lowest cost ETFs taking positions in companies with a proven history of growing earnings while commercialising innovation, and/or a unique market position protecting them from substitution. Don’t pay your money away in fund management fees. Diversify in holdings, (never more than 4% in one company) , sector, and geography and keep on buying based on excellent research and advice. Sell whenever you lose confidence in the company management or long term prospects in the sector. Keep enough in TDs to live for five years, if you rely on dividends. Think long term and expect and be unaffected by market gyrations of varying sizes on a regular basis. Think with a 25 year horizon even if you are 75 - and expect that’ll include at least two major recessions. If you do this you can expect to earn 4-5% over the rate of inflation over the long haul. Over the last decade - it’s been significantly more, but that’s probably an aberration.

So what you're saying is we should be really really savvy share investors. Choosing really good companies to invest in, then watching everything they do...

Most people either can't or won't do this. Nor should we expect them to.

I don’t expect people to do anything, but I do feel sorry for the many I know who are going to run out of money because they live too long and invest in TDs.
You don’t need to be savvy - just understand and follow the rules and find and follow quality research and advice. And you can leave out the second with low cost tracker funds. It takes me about a day a month to keep current. Property is much higher risk, as it has low earnings, is volatile and highly geared and TDs are a sure slow route to wealth destruction.

well it gets closer and closer to physical cash, gold and silver until we come out the other side.

If we dont come out the other side you might want to swap some of that gold for guns

You think pump action shotguns or rifles will make a difference?
Try any thing else and your hacienda will have a visit from the police...en masse..
Invest in your community if it gets that bad...

It's a no brainer for me. Today I had a term deposit mature at ANZ. I transferred the funds into my MFL Super Fund. I am a long term investor in this fund, which invests in property. The returns have been 12.61% over 1 year, 14.09% over 10 years, after fees, and before tax. Withdrawals take 5 working days. The fact that NZ doesn't have a deposit guarantee scheme, helped make up my mind. The fund has been closed to new investors for a few years now. I have also got NZ Property as part of a portfolio I have with my financial planner. The return from ! April 2018 to March 31 2019, is 24.69% gross. From the previous thread, I detect that many investors are not investors at all. You must be disciplined in your approach, and not simply chase the market.

That’s annoying - my return for the same period was 23.5%

Cash out and buy arable land with a good water supply and plant Pīwakawaka. once plucked, they make a very tasty broth.

Your list begins with KiwiSaver but doesn't seem to mention broader PIE funds. A sensible alternative to term deposits could be a diversified PIE fund run by a reputable manager that invests in fixed interest and equity income-generating securities.

Peer lending could be added. Risks vary depending on platform and finding borrowers seems more difficult now. Also directly owned bonds as against just bond funds. Rates not much better than TD's (often worse on secondary market). They could be sold for likely (taxable) capital gain if rates drop further or held to maturity so flexible.
Maybe rate setting by inflation targeting will be abandoned before we go negative...

Term Deposits are the lowest form of investing really, along with the old Bonus Bonds!
They are fine if you want to just retain capital, but they aren’t really an investment nowadays at all.
Don’t believe there is a safer investment than positively geared property bought under value and with upside.
Banks love it too, that is why they prefer it as their security over anything else.

Foreign domiciled trust that earns and retains its money overseas, gifting you with funds whenever you holiday overseas. Even if the trust only invested in term deposits with a similar yield to NZ by being domiciled in a foreign jurisdiction with lower taxes the trust can achieve a higher effective rate of return.

Any countries come to mind?

Nomad Capitalist keeps a good list of countries to holiday in.

Interest rates should be set by the market, returns would reflect risk.

Gold, guns and beans. Especially guns.

I am pretty risk averse-perhaps it's my Scottish heritage and my age-74. My primary investment is in a portfolio of good quality dividend paying equities which I manage,followed by a rental property,a couple of bonds, an increasing pile of cash in TDs(8 spread over 3 banks)Kiwibonds and some miscellaneous items.
I would never have less than 5% of my total portfolio in cash,but over the past couple of years,I have very gradually been taking some profits from the share portfolio and that has now increased to 15%. I think there will be a significant fall in share prices at some point and I want to be ready to start buying again when that happens. I know that I won't get the timing spot on,but that doesn't matter. The rate of interest on these TDs is not material;they are there primarily to give me flexibility.
I try to keep things as simple as possible-I have no interest in non-income generating 'investments',so I am quite prepared to lose out on shares like Zero and alternatives like Bitcoin. I am happy to leave these to others.

Good common sense Linklater. Perhaps it’s shared scots heritage but your approach almost exactly matches mine. It works remarkably well, with minimal stress. Most commentary here would call your approach high risk, but I’ve seen about four generations blow their wealth holding primarily term deposits.
With a long view and disciplined approach you can ignore all the chicken little commentary.

You miss the point - not one of his 'investments' actually 'do' anything. They expect someone (or something) else to do something. Tenant to earn, for example. So every one of those 'investments' are 'parasitic' on real activity; work done, energy expended.

That all worked while there was so much surplus energy, and so much per-head too. Given the decrease of the both counts, at some point 'investments' don't get underwritten. It becomes an overhang. And that's before we talk about inter-generational disenfranchisement.

Still running term deposits here, what else pays you monthly and is about as safe as you can get ? Not greedy and not looking for a better return at present but its looking more likely that a large chunk of it will go back into a house. Cannot bring myself to buy in Auckland, been here just about all my life but its time to be honest, Auckland is now stuffed.

Currently there's a mix between bitcoin and term deposit. BlockFi says they'll give you 6% interest on your bitcoin if you store it with them. Not a recommendation, but just to say there are more strategies then buying bitcoin and hoping the value increases, or at least does not inflate away.

Sorry to necro a thread that is 3 months old, but given the 5 bps drop in the OCR, and the tumbling of TD rates since, I'm finding I have to revisit topics like this for info as I have a number of PIE TD's that will mature shortly, and wondering if it's worth taking the hit of terminating them early so I can reinvest while the rates are still in the upper 2's or put my cash somewhere else. Unfortunately, I'm a FHB saving up the deposit so I can't take on much risk, but what I've not seen much of in the comments is the risk analysis for each of the alternatives in David's list. Some of the suggestions I understand enough to leave well alone in my current situation, but I need more data for the others.

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