Westpac Private Bank offers Australian inflation-linked term deposits in Singapore

It is targeted at accredited investors and require a minimum deposit of A$100,000.

Inflation Linked Deposits are tailored term deposits which allow investors to receive fixed interest payments that vary with the Australian Inflation Rate.

In a release, Westpac Banking Corporation, Singapore branch said it has launched two new innovative investment products for its customers in Singapore and across the South East Asia region; ‘Inflation Linked Deposit’ and ‘Coupon Select Deposit’.

The Australian inflation has grown 69.5% since 1989-1990 – or an annual rate of 2.7%. This is beneficial to investors who are concerned about rising inflation eroding the future purchasing power of their cash investments or term deposits.

Sean Straton, Head, Westpac Private Bank (Singapore) says, “One of the challenges today for Asian investors is protecting their wealth from the risks associated with rising inflation. This is particularly true with the cash allocation of portfolios. This product enables accredited investors to potentially receive an enhanced yield in the form of tailored fixed interest rate that is adjusted for inflation.”

A second product tied in with the Australian economy that Westpac is launching is the Coupon Select Deposit. Coupon Select Deposits are tailored term deposits designed to allow accredited investors to enjoy the best of both worlds; a tailored Fixed Rate, a Floating Rate, or a combination of both. The Floating Rate is based on the Australian bank bill swap rate plus a margin.

Both products are targeted at accredited investors and require a minimum deposit of A$100,000. Inflation Linked Deposits may be particularly attractive to investors such as retirees who want to receive regular coupon payments from their term deposit and are concerned that inflation may erode the purchasing power of their future coupon payments.

The Coupon Select Deposit may suit customers who have a good understanding of interest rate markets, as it gives them the flexibility to tailor their deposit to potentially increase returns over a traditional deposit.