'Lower forever' no longer safe interest rate view

Many investors have been forced to look for somewhere other than the bank to deposit their money as interest rates fell to historic lows – and stayed there – over recent years.

But the United States’ Federal Reserve is preparing for a round of interest rate rises, and banks in New Zealand - faced with the increasing cost of international funding - are competing hard for domestic money.

That has meant the rates available for depositors are once again lifting.

“Term deposit rates are a bit better at the moment even though interest rates have gone down. There’s competition from banks driving that,” ASB’s general manager of wealth, Jonathan Beale, said.