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ASB Customers Can Have Their Pie And Eat It Too

Contributor:
Fuseworks Media
Fuseworks Media

7 July 2008 - ASB is launching a new savings product, offering customers the opportunity to pay less tax on their investment income.

The ASB Cash Fund is a new kind of investment product which takes advantage of the Portfolio Investment Entities (PIE) legislation. It gives investors a great on-call earnings rate, currently 8.25% p.a., and offers tax benefits on this income when compared to a bank deposit.

A 39% taxpayer would need to earn 9.47% interest p.a. on a regular savings account to achieve the same after tax return as the ASB Cash Fund.

"New government legislation encouraging New Zealanders to save is changing the way people in the higher tax brackets invest," says Peter Hall, Head of Business Ventures, ASB.

"The ASB Cash Fund is an innovative unit trust which provides the benefits and simplicity of an online savings account. Yet it offers ASB customers a tax efficient way of saving, as well as a great combination of a competitive return with no base and transaction fees."

Bank savings and term deposits are currently taxed at the rates of 19.5%, 33% or 39% depending on the individual's tax bracket. Under the PIE legislation, customers with a marginal tax rate of 39% will only pay 30% tax on income from the ASB Cash Fund - a 9% saving. There are also advantages for customers on a 33% tax rate.

ASB Bank Limited guarantees ASB Cash Fund account balances and returns. The guarantee is unconditional and unsecured, and is equivalent to depositing with ASB directly. Funds will be 100% invested in New Zealand dollar deposits with ASB Bank Limited.

"In these uncertain financial times, the ASB Cash Fund means people can invest with the comfort that their account balance and returns are guaranteed by ASBwhile still receiving strong earnings on their savings", says Mr Hall.

Investments will be available from 7 July 2008.

Funds in the ASB Cash Fund are accessible at any time and customers can monitor their balance and transact in a similar way to an online account. For further information contact your local branch, call 0800 ASB FUNDS or visit www.asb.co.nz.

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