Negative interest rates
The possibility that the Reserve Bank of New Zealand will introduce negative interest rates at some point has been raised by several economic commentators. It is unclear whether this would lead to savers paying to keep their money in the bank, however what is certain is that such a regime would further reduce the returns they could earn. While negative interest rates would also impact members in the Scheme’s Cash Option, it is important to remember that investing in the Cash Option is not the same as cash in the bank. For example, the Cash Option invests in term deposits as well as cash-like investments such as short-term bonds issued by the government, local authorities, companies and banks.
8 June 2020