Marac to offer non-guaranteed term deposit
Marac will test the waters early next year when it launches its first term deposit not covered by the government's retail deposit guarantee scheme.
Wednesday, December 23rd 2009, 9:50PM
by Paul McBeth
After The Treasury tinkered with the scheme last month to allow deposit takers to offer both guaranteed and non-guaranteed deposits, Marac announced it will offer non-guaranteed term deposits in its outlook newsletter for the New Year.
Retail investment manager Andrew Ford said the company had "lobbied hard" for the change, as it would prefer to pay its investors a higher interest rate rather than give the money to the government for a guarantee, though it will provide a guaranteed option as well.
With finance companies paying about a 1% premium in fees for the guarantee, investors in non-guaranteed deposits could "potentially" see this passed on to them, he said.
"We would like to pay our investors higher returns than pay the government in a guarantee fee," Ford told depositrates.co.nz. "It's also about the transition from people investing solely in deposits under guarantee - we want people to invest in Marac."
Marac came through the global financial crisis in good shape after parent Pyne Gould took its bad loans off the finance arm's books and put them into new unit designed to deal with distressed loans. On top of this, the company raised $273 million to help it comply with the Reserve Bank's new regulatory regime for non-bank deposit takers and shore up its exposure in property development as it exits the sector.
Ford said the company will be "very very clear" as to which term deposits are covered by the government's guarantee and which are not.
See Marac's current rates
Paul is a staff writer for Good Returns based in Wellington.
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