Case study short-term saving
Gayle wants easy access to her cash
Gayle's investment goal is to buy a home within 2
years. She has moved back in with her parents and is saving
as much as she possibly can towards a deposit.
Gayle mentioned to a workmate that she has already saved over
$20,000. She is looking for a two-bedroom house for around
Gayle is a qualified vet. She knows that with her income, banks
will offer her a large loan. She would prefer to save a bigger
deposit so she will have a smaller mortgage.
'I want to save at least $40,000, but $70,000 would be better,'
Gayle says she can achieve her goal comfortably by keeping her
money in a savings account earning 4% interest.
'I am already keeping an eye out for properties. It's important
to me that I can withdraw my money immediately, if the right house
comes up for sale. It might happen this year; or it might not
happen for a year or two.'
Her workmate doesn't understand why she doesn't try to
fast-track things by investing the money in the share market.
'Shares can go up by 20% in a year,' he says.
Gayle knows a savings account fits her needs best.
'On any given day I know exactly how much I have in my account.
I wouldn't have that certainty if I invested the money in shares.
Shares could just as easily go down by 20% just when I need the
Last updated: 18 Aug 2015