Finding the best interest rate return for your investments is relatively easy. Financial institutions from banks to building societies - to credit unions and investment houses are prolific advertisers on radio and TV - and in newspapers and journals.
Beware those that offer a rate of interest well above the average. They may look good on paper - and from the size and scope of their advertising they appear rock solid - but they could be nothing more than an in-house financier for a builder speculating in apartment blocks. Great while the market is booming ! A disaster when the market cools !
Now a new flam is making an appearance. Interest offers are usually on the basis of a wide choice of investment terms. The rate of interest varies depending on the number of months - or years - chosen.
Most people settle for the period offering the best return - and when that investment matures they usually get a reminder letter from the company involved offering the opportunity to reinvest.
This is where the unwary face a trap. This letter gives them a short period to add money, withdraw funds or select a new investment term. It also suggests that if ignored the funds will be automatically reinvested - and the unwary assume that this will be on the same terms as the initial investment.
Not so ! This is where the mix of terms and corresponding interest rates suddenly begin to vary. The old term is no longer the one attracting the best return. That is now a month longer - or a month shorter - than the previous offer.
It is a wise idea to review every investment that matures and carefully check the new terms being offered to ensure that you are getting the return you expect. Otherwise - you may find that your investment is earning as much as two percent less interest than the market benchmark !
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