By Philip Macalister
Tuesday 14th February 2006
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Rabobank is making a big play in the market by offering an online call account with a market topping 7.35% rate, and competitive term investment rates.
People who sign up with Rabobank have the choice of leaving it in the call account or investing directly into managed funds.
While the bank isn't disclosing how much it gets paid for selling the managed funds there is a 0.75% entry fee. RaboPlus general manager Mike Heath says the bank isn't dealing with advisers.
In fact its website makes the suggestion advisers charge high fees.
"We help you avoid high charges," it says. "Because you make the decisions, there are no advisers to pay. By allowing you to purchase from the selected managed funds independently online, RaboPlus offers you the most competitive rates on the market."
Heath describes the bank's target market as people who are "active managers" of their own money "financially savvy" and "internet savvy".
Heath says Rabobank will provide customers with all the information they need to make investment decision appropriate to their risk profiles. This includes risk profiling and five model portfolios.
Rabobank is offering 10 funds in total. Three balanced funds (one from Tower and two from AMP), AMP's global fixed interest fund and its NZ Property fund and five share funds (Asteron's Asian Equities, AMP's Strategic Growth and Global Equities, and Tower's NZ Equities and GAM Hedge fund).
Heath says Rabobank's call and term deposit proposition is around offering good rates, no fees and convenience. Other big features the bank is pushing are its AAA Standard and Poor's credit rating and the security features tied in to its online call account operation.
"Security is a strong feature of the new service."
RaboPlus customers will be issued with an internet security token which must be used in conjunction with a personal identification number to access their account. The token generates a new one-time passcode every 36 seconds and, when combined with the user's PIN, creates a log-in combination that is valid only for that particular user at that moment in time.
"RaboPlus will effectively be the bank you have on the side. It won't replace your primary bank, but will offer savings products with a competitive and attractive rate for serious savers and the financially savvy. The online structure means we can keep running costs low and interest rates high," Heath says.
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