Term deposit rates are still low, should I switch to shares?

Wednesday, 30 January 2019

With current bank term deposit rates hovering around 3 per cent to 3.5 per cent, I'm giving some consideration towards dabbling in the New Zealand share market. Looking at the share table in the paper, I'm a little confused when perusing the dividends shown in the cents-per-share column. There is often a difference compared to the Money app in Windows 10. Obviously there is a lot to be learned before participating in the market. Are there venues available where further information of a general or technical nature can be accessed for/by the budding investor?

Simply seeking higher returns isn't a good reason to buy shares if it doesn't fit with your circumstances.

Differences in reported dividend can come down to how it is calculated and whether the amount includes tax.

I can't offer you personalised advice but I would urge caution in simply looking at shares because term deposits aren't producing enough of a return.

The risks involved in each investment are quite different.

You're very unlikely not to get your money back if you put it in a term deposit. If you invest in shares, particularly a small number of them, you could easily see the value of your investment fall in the short-term.

If you have time to stick it out and wait for a rebound, that's fine, but it sounds from your message that you may rely on your money for ongoing income.

* Savers have options if they want a better return than banks can give them

* Pensioners relying on investment income are suffering**

The Financial Markets Authority and Sorted each offer some information for budding investors. ASB and ANZ offer online platforms to buy and sell shares and I really like the information ASB in particular offers for those starting out.

Our vehicle has just come off its three-year warranty and the air conditioner failed. They first put in gas which cost $110 and this lasted three days. They then put in a rear evaporator and gave us free parts but charged $600 labour. Three days later, it stopped working. They then put in a front evaporator and again gave us free parts but a $700 bill for labour. Three days later and it is still not working properly. With the holidays, we have had to suffer with no air conditioning. I asked for a loan vehicle but was declined. What are our rights going forward?

AA motoring adviser Cade Wilson says it sounds like 'either a lot of failures or the repairer doesn't actually know what is wrong with the system'.

He said it was common for a manufacturer to offer a parts-only 'goodwill' repair offer.

'This is up to the vehicle owner if this is a remedy they choose to accept or if they will ask for complete remedy at no cost - a bit like an extended warranty claim. I would expect a correct diagnosis and testing of the system in order to prevent further inconvenience especially if you are paying for the repairs.'

A reader has had problems with her new car.

He said the question to ask when considering what rights applied under the Consumer Guarantees Act was: 'Is it acceptable for a three-year-old vehicle to be experiencing a fault or faults of this nature?

'Generally speaking with any vehicle of this age, the answer would be no. So the vehicle is not of acceptable quality. You might need to contact the manager of the centre and outline the issues and ask for an explanation into the situation and what further assistance will they provide.'

Do you have a personal finance or consumer question you'd like answered? Email susan.edmunds@stuff.co.nz