InvestNow starts offering BNZ term deposits with special rates; Wants other banks on its platform so people can shop around for the best rates without opening accounts with different banks

Online fund supermarket, InvestNow, is starting to offer term deposits.

Its members can now put money in a term deposit with a bank, even if they don’t have an account with that bank.

The benefit is that they only have to verify their identity (in line with anti-money laundering rules) once – when they become an InvestNow member – rather than again if they want to make a term deposit with a bank they don’t already have an account with.

BNZ is the only bank to offer its term deposits on the platform at this stage, but InvestNow says it’s in the process of getting other banks on board.

Once it does so, members will be able to shop around for the best interest rates, without having to potentially open accounts with various banks.

To kick off the new offering, BNZ is offering the following special rates to InvestNow members:

1-month: 1.82%
3-months: 2.73%
6-months: 3.27%
9-months: 3.38%
1-year: 3.49%

The 1-month and 1-year rates are among the most competitive in the retail market.

To compare them to other advertised rates, see these interest.co.nz pages: 1-9 month rates1-5 year rates.

Since InvestNow was launched in March 2017, its members have invested $250 million in 92 funds managed by the likes of ANZ Investments, Smartshares, Vanguard, Salt Funds Management and Harbour Asset Management.

While members can invest a minimum of $50 in these funds – which span asset classes, sectors and management strategies – they have to put at least $2000 in a term deposit.  

InvestNow doesn’t charge members fees.

It generates income by charging fund managers to list their offerings on its platform. It also earns interest on money members deposit into their InvestNow transaction accounts, before they move this to the funds of their choice.  

The platform does not offer compounding interest payments for individual term deposits. Rather interest is paid to members’ transaction accounts.

They can however choose to automatically roll over a term deposit at maturity, including both the principal and interest in a new term deposit.

When it comes to term deposit rates, InvestNow says it makes the most recent rates available at noon every business day.

The BNZ term deposits on offer via the platform range from 1-month to 5-years.

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8 Comments

So what do we reckon? If we go to the BNZ directly and say "Match this!" they are going to say - NO !?
Fast way to lose a customer base if they do......

This seems to be a natural progression in terms of the world we live in. I am an ANZ client, and often frustrated that I can't access different banks' term deposits. This helps solve this if InvestNow does get more banks on board.

Take your Driver License and your Tax Number with you into ANY bank, and Voila! (See comment below for how easy it is!)

Much easier than opening bank accounts all over, choice of term deposit rates (when Investnow list more). Could be very useful and add to the platform.

We have had term deposits with at least 6 banks at a time for a number of years now and are able to bargain with most of them over interest rates. As we are pensioners we rely on the interest to supplement our super so have it paid into our main bank's call account. How do you get your money out of InvestNow's transaction accounts? Will they pay interest into an external bank's account? How liquid is your investment:?

Hi Meg, when your TD matures and/or you receive interest from your TD in your InvestNow portfolio those monies are credited to your InvestNow Transaction account so you can readily and easily invest in a new TD. If you want to have the cash in your main bank account you simply transfer it across. At the moment there is no automatic transfer of your money from InvestNow to your main bank account but that is a facility we have planned for on our roadmap. The key benefit we are offering is the ability to invest in TDs from a range of banks all from one place. Thanks for your question. Regards Mike Heath GM InvestNow. 0800 499 466 mikeheath@investnow.co.nz

Could Oz banks, ( not local subsidiaries ) using A$ and Oz interest rates be added to this? As opposed to having a local foreign currency account that offers pathetic interest rates.

Mark, good question.

We are in discussions with a major global bank about offering foreign current TDs for investors who want exposure to overseas interest rates and exposure to the foreign currency.

We first approached them about NZD TDs but they'd prefer to initially offer offshore TDs.

Watch this space.

Regards
Mike Heath
GM InvestNow
0800 499 466
mikeheath@investnow.co.nz