ANZ Winds up Bonus Bonds- Thoughts?

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ANZ Bank New Zealand

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  Sadie on 27/08/2020 - 09:59

  Depends how much you have invested and how much risk you are willing to take?
  I only have $250 invested, so I'm happy to leave it in and see what happens.

  My other half has more invested and isn't willing to take the risk.

  • 

    ranjitsinghrai90 on 27/08/2020 - 10:06

    Thanks
    This is the statement regarding reserves-

    At the end of March last year, that would have been about 1.8 cents per bond.

    Oh I just realised it is not 1.8 DOLLAR per unit rather it is 1.8 CENTS per unit.
    So that means your bonds will be multiplied by 1.018, if value remains same but they will claim expenses which will further reduce the multiplier.
    Not worth waiting for scheme to wound up.

    • 

      Sadie on 27/08/2020 - 11:09

      Apparently there's a bit of unclaimed money in Bonus Bonds too

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  Wakrak on 27/08/2020 - 11:42

  Good yarn over at Geekzone on this topic

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  Alan6984 on 27/08/2020 - 14:31

  +2

  Its actually hard to say for sure.

  As quoted above, as of yesterday (I believe) there were about $56m in reserves that would get paid out to holders, on top of the face value of their bonds.

  That currently works out to the 1.8% return over about 12 months also quoted above.

  That might be more than you'd get in the bank, depending on what savings rate you get, and probably, but not certainly, less than you'd get invested in, say, a diversified share fund.

  However, ANZ will be getting paid to wind it up, so deduct those fees from the $56m - means less than about 1.8% return over 12 months.

  However, as most people have done that simple maths and said the return isn't worth it, they are withdrawing their funds. As those withdrawals get processed, it doesn't affect the $56m (except for the fees that ANZ charge I guess).

  Also, consider that, if there are no more draws between now and the winding up (I am guessing that may be the case from some date - I haven't gone and checked), then all the interest on the funds invested would be added to the $56m instead of being paid out to random winners.

  Therefore, it is anyone's guess.

  In an extreme case, you could be the only holder left at the end, and get the whole pot of reserves, which might be $50m or might be $2.23.

  Reality is that many people will cash up, so if we just guessed that 75% of funds are withdrawn, the simple maths becomes about a 1.8 x 4 = 7.2% return over about 12 months. If we further assume that 1/3 of the reserves are used up in the wind up fees, then that becomes 4.8%. If we think that the funds invested will return 2% over the period, then that could go up to 6.8%.

  Conclusion

  Its not ridiculous to keep the funds in there, assuming you don't have any realistic expectation of needing the cash for 12 months at least.

  Alan.

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  ScoobyNZ on 28/08/2020 - 08:39

  I have about 6k in there and I am withdrawing it. I did a little looking for savings accounts last night and found that the best interest rate was 1.4% from rabobank, in an account with a 60day notice period. So in theory you still have access to your money, just not instantly. Which is much better than a 60 or 90 day term deposit.