Well, for most banks and financial institutions, deposits are guaranteed by the Government by up to $250k per person [those FIs that qualify] - the system as we now have favours borrowers than depositors you know that. Borrowers can pay back their loans later in the future that is worth less than it is today , and the way it is is to encourage more borrowings, see and household debts can only go so high. That's why banks love high income individuals borrowing to the hilt because they make more money per loan from them than to someone who has great balance sheet but little income (who can be more credit worthy than the high income individual who could lose his job and who has been spending like no tomorrow ).
When the major reset comes, but I prefer to call it the Big Kahuna (wave), it would offer vast opportunity to those who hold cash - CBA at the depth of GFC was selling at $26. That's why I think it is important to keep financial resources in position where it can be mobilised on short notice to remove from harms way. Can you do that in a unit trust or mutual fund- it takes a couple of days to redeem and funds can be frozen. Can you do that with super- you are locked in and regulations can be changed such that you have limited access- or access comes with a penalty or some sort. Can you do that with term deposits - I think they have also changed the rules on early redemption before maturity. The price you pay with greater accessibility to enable nimbleness is lower yield - and that is what the world is coming to - but capital preservation ahead of yield. But, there will always be pockets of opportunities arising from time to time, like the equities market from Feb this year to end of July [ pocket of opportunity that I would not have imagined coming out from a brutal market onslaught last December ] during which Opportunity Stocks came into the picture, and like 5 year term deposits being offered at 7-8% during the GFC when TD rates were even higher than lending rate (because the banks face even higher rates from their offshore borrowing) - crazy times would have crazy unconventional opportunities, just need to open your eyes and ears.
