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Term Deposit Rate Comparison

2.5% Guaranteed Term Deposit, 6% Secured Mortgage Debt, or 6.5% Potential Stock Market? 

In recent years, the low-rate interest environment has severely impacted the returns that can be made on your investments. It’s hard to find an investment opportunity that provides an acceptable level of income while keeping your principal amount safe.

 term deposit rates


2.5% Guaranteed Term Deposit Rates and Inflation Erosion

While there may be individuals who claim you can multiply your money without taking on any risk, most people realise that an investment that guarantees both high returns and complete safety is probably too good to be true. 

As a result, they keep their money in risk-free government-guaranteed bank deposits or bonds. But investors often don’t realise the price that they are paying for this safety.

An investor who is unwilling to bear any risk to capital will currently achieve a post-inflation return of just 1% per year!


Inflation eats away cash returns

Bank fixed term deposits currently provide a government-guaranteed capital security rate of return of between 2% to 3%. That’s an average return of 2.5% per year.


Term deposit rates of the Big 4 Australian banks


Term deposit monthly interest rate for 24 months

National Bank 2.55% pa
Commonwealth Bank 3.10% pa
ANZ 2.10% pa
Westpac  2.35% pa

But, according to data from the Reserve Bank of Australia, inflation rates currently sit around 1.5%. So, effectively, a bank term deposit will yield a post-inflation return of only 1% pa! (Nominal return of 2.5% per year less inflation rate of 1.5%).

6.5% Potential Stock Market Rates and Risk 

Data accurate as at August 2017. 


Understanding the Risk / Return Paradigm

As a generally understood investment principal, the greater the risk, the greater the potential for higher returns.

The “modern portfolio theory” pioneered by Harry Markowitz explains this. It says that an investor expects higher returns in exchange for a willingness to take on enhanced risk.


The Risk Premium

If a risk-free bank deposit returns 2.5%, an investor would consider deploying funds in the stock market provided the potential return was at least 6.5%. The 4% difference in return is the “risk premium” (6.5% - 2.5%).

It is generally accepted that the risk premium on shares is 4-5%. The risk premium on property is usually lower as it’s a more secure form of investment.


6% Secured Mortgage Rates

Is there a way to achieve high risk premium rates of return without the high risk?

At Credit Connect Group, we offer net fixed returns from 6% pa on investment in mortgages with the security property registered in your name!

Better returns than term deposits, more secure than the stock market!


About the Security

Each security property is conservatively valued by an independent panel of valuers who hold the appropriate insurances.

We lend up to a maximum amount of 65% of the value of the security property, with a mimimum equity cushion of 35%.

Advancing up to two-thirds of valuation is an industry best practice that has stood the test of time. In the event of default arising, having up to 35% in equity allows for coverage of interest not paid, borrower litigation, market value fluctuations and costs.


About the Opportunity

The banks and traditional lending institutions are under increasing pressure to slow property investor activity. Lending criteria is getting tougher and the banks are withdrawing completely from lending in certain market sectors - most notably to foreign and interest-only investors in the residential, commercial, and construction sectors. 

Using private finance, peer to peer lenders are able to stand in the gap and meet this supply-and-demand shortfall. Wholesale investors with cash are in the best position to be able to take advantage of the most attractive of these investment opportunities.



When it comes to both risk and reward, guaranteed term deposit returns of 2.5% and potential stock market returns from 6.5% just can’t compare to net fixed returns from 6% on a secured mortgage investment! 

Sign up as a wholesale investor to access our exclusive investment opportunities and start earning higher returns now!

Register To Invest



Disclaimer: This information is for general education purposes only and is not intended to constitute specialist or personal advice. This information is not intended to be a complete statement of all information and has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should consider the appropriateness of the information to your own situation and needs before taking any action. It should not be relied upon for the purposes of entering into any legal or financial commitments. All loan applications are subject to our normal credit assessment and loan suitability criteria. Terms, conditions, fees and charges apply. Past results are not a guarantee of future performance. Specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy.

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