Hi. We have just sold our home and have a sum of money to put into term deposit. The bank we are currently with is backed by government for $250k deposits. Are we best to do 2 separate deposits and are we also best to have fall due in different financial year? We plan on buying again within 12 months. My partner is working however I am not at moment but plan to shortly.
Thank you

Hi there

Do you own another property with a mortgage at the moment?

Kind Regards
Tj Virdi

Hi there,

When interest is earned on bank deposits tax is paid at the individuals income tax rate which is determined by total income for that financial year. If the account is held in joint names the tax is split equally between both account holders.

If a couple are on a single income they will pay tax on the working spouses marginal tax rate and the non working spouse will pay tax on interest earned, if this interest exceeds the tax free threshold.

Staggering the term deposit maturity dates over two financial years will change when the income is taxed but it may not necessarily reduce the amount you are taxed. This would depend on marginal tax rates which determine the amount of tax payable.

The APRA list of Authorised Deposit Institutions has been updated a few days ago, heres the link if you want to check it out.
http://www.apra.gov.au/adi/pages/adilist.aspx

I hope this helps, let me know if there is anything else I can help with.

Stuart Christie
https://www.linkedin.com/in/stuartjchristie/