Daiwa Australian Fixed Interest Fund
Daiwa is the second-largest securities broker in the world and has been called the most international of Japan’s Big Four securities houses. Daiwa conducts traditional investment banking activities and also operates as a retail brokerage.
How it Works
When investing in a Fixed Interest Fund, the money is pooled with other investors’ capital and placed into funds that specialise in Australian or international shares, property, fixed interest or cash, which are managed by fund managers. Investors are also able to switch between funds without any capital gains tax implications. The returns these investments earn are taxed in the hands of the provider and the earnings are reported net of tax. The tax on these earnings is set at the current company tax rate of 30 per cent. This is a nominal rate that can be further reduced through franking credits or other offsets.
Because the provider pays the tax, investors don’t need to declare any income in their tax return. Nor do they need to keep any capital gains records. If the investment is held for 10 years or more, there is no additional tax payable on the investment earnings. This is called the 10-year rule. However, if any withdrawals are made before the 10 years is up, the profit – which is the proceeds less the total amounts invested – need to be included in the investor’s assessable income. It will then be taxed at their marginal rate, although any profit that is assessable will receive a 30 per cent tax offset.
How the earnings are treated from a tax point of view depends on when the money is withdrawn. If the funds are accessed within the first eight years, then all the earnings are assessable. If the money is accessed in years eight to nine, then two-thirds of the earnings are assessed, while if they are accessed in the ninth year, then one-third of the earnings is assessed. After the 10th year, all earnings are tax paid and are not assessable.
If the investor’s marginal rate is lower than 30 per cent, they will receive a credit. Investors on higher marginal tax rates pay additional tax. For example, if their marginal tax rate is 36 per cent, they will have to pay 6 per cent tax on the earnings. The other rule that needs to be clearly spelt out to investors is the 125 per cent rule. It states that investors cannot contribute any more than 125 per cent of their previous year’s investment if they want to avoid restarting the 10-year rule. (For tax purposes, the 10-year period is applicable from the start date.)
While the funds are invested, the product provider pays the tax on the earnings so there is no assessable income to declare. There are also no taxes or duty when transferring the fund to another person and no capital gains tax when the fund is realised or when switching between investment options. This tax benefit is especially useful for investors who want to keep their income under a certain limit to qualify for benefits that are based on taxable income such as the Commonwealth Seniors Health Card
.Having unhindered access to the funds is a key benefit. Investors’ money is not tied up as it is with super as there is no condition of release. The money can also be used for any purpose and withdrawn at any time. There are no work tests or contribution caps; contribution limits are only subject to the 125 per cent rule. A regular savings plan can also be set up to make contributions
Fixed Interest funds are not complicated and require little paperwork. There is also no need to include any details of the fund’s earnings in a tax return. Protection: In the event the investor becomes bankrupt and is the life insured within the fund, the fund is protected from the trustee of bankruptcy. However, any transfers to a Fixed Interest Fund where the intention is to defeat creditors may not offer protection from the trustee.
Our Fixed Interest Fund works the same as a Fixed Income Fund. This is a professionally managed investment fund that pools money from a large number of investors to buy a variety of securities, such as stocks, bonds, money market instruments or other securities. When you buy a share in a Fixed Interest Fund, you own a portion of all the investments in that fund. If you’re a beginner investor or prefer to take a handsoff approach, it’s worth considering how Fixed Interest funds can help you reach your investment goals. There are several types of Fixed Interest funds, in this case we are offering a fixed income or bond fund. A bond fund, also known as a Fixed Interest Fund, is a type of mutual fund that is made up of bonds and other types of debt securities, such as government bonds, municipal bonds, and mortgage-backed securities. Fixed income funds are not susceptible to market volatility and provide a guaranteed fixed rate of return. The Daiwa 6 Month – 10 Year Fixed Interest Fund guarantees to return a rate between 4.43% and 7.60% per year, for the lifetime of the Fund depending on the term. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
Anyone aged 18 or over, who is resident in Australia can invest in a 6 Month – 10 Year Fixed Interest Fund. In general, a person is an “Australian resident”, as defined in the Social Security Act 1991. An Australian resident is a person who resides in Australia and has permission to remain permanently—either because they are: an Australian citizen; the holder of a permanent visa; or a protected Special Category Visa holder.
The minimum amount you can invest is $50,000 into an Fixed Interest Fund. Contributions can be made to the 6 Month – 10 Year Fixed Interest Fund after the initial Investment. You can open additional Fixed Interest Fund plans with us as long as you do not exceed the maximum amount of $2,000,000.
You can open a 6 Month – 10 Year Fixed Interest Fund via telephone, and lump sum payments are accepted by wire transfer only. All payments must be paid from the bank account specified at the point of application and all funds must be received within 14 days, unless prior authorisation is given, following a completed application. All funds will be paid into segregated client accounts operated by Tier 1 Australian Authorised Deposit-Taking Institutions. Our banking partners include Commonwealth Bank, ANZ, NAB, Westpac and Macquarie.
We use your money to invest in a mix of assets including government and AAA corporate Bonds that enable us to provide you with a return of your lump sum and the guaranteed growth over the term of your Investment.
Our Fixed Interest Fund works the same as a Fixed Income Fund. This is a professionally managed investment fund that pools money from a large number of investors to buy a variety of securities, such as stocks, bonds, money market instruments or other securities. When you buy a share in a Fixed Interest Fund, you own a portion of all the investments in that fund. If you’re a beginner investor or prefer to take a handsoff approach, it’s worth considering how Fixed Interest funds can help you reach your investment goals. There are several types of Fixed Interest funds, in this case we are offering a fixed income or bond fund. A bond fund, also known as a Fixed Interest Fund, is a type of mutual fund that is made up of bonds and other types of debt securities, such as government bonds, municipal bonds, and mortgage-backed securities. Fixed income funds are not susceptible to market volatility and provide a guaranteed fixed rate of return. The Daiwa 6 Month – 10 Year Fixed Interest Fund guarantees to return a rate between 4.43% and 7.60% per year, for the lifetime of the Fund depending on the term. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
Our Fixed Interest Fund works the same as a Fixed Income Fund. This is a professionally managed investment fund that pools money from a large number of investors to buy a variety of securities, such as stocks, bonds, money market instruments or other securities. When you buy a share in a Fixed Interest Fund, you own a portion of all the investments in that fund. If you’re a beginner investor or prefer to take a handsoff approach, it’s worth considering how Fixed Interest funds can help you reach your investment goals. There are several types of Fixed Interest funds, in this case we are offering a fixed income or bond fund. A bond fund, also known as a Fixed Interest Fund, is a type of mutual fund that is made up of bonds and other types of debt securities, such as government bonds, municipal bonds, and mortgage-backed securities. Fixed income funds are not susceptible to market volatility and provide a guaranteed fixed rate of return. The Daiwa 6 Month – 10 Year Fixed Interest Fund guarantees to return a rate between 4.43% and 7.60% per year, for the lifetime of the Fund depending on the term. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
Our Fixed Interest Fund works the same as a Fixed Income Fund. This is a professionally managed investment fund that pools money from a large number of investors to buy a variety of securities, such as stocks, bonds, money market instruments or other securities. When you buy a share in a Fixed Interest Fund, you own a portion of all the investments in that fund. If you’re a beginner investor or prefer to take a handsoff approach, it’s worth considering how Fixed Interest funds can help you reach your investment goals. There are several types of Fixed Interest funds, in this case we are offering a fixed income or bond fund. A bond fund, also known as a Fixed Interest Fund, is a type of mutual fund that is made up of bonds and other types of debt securities, such as government bonds, municipal bonds, and mortgage-backed securities. Fixed income funds are not susceptible to market volatility and provide a guaranteed fixed rate of return. The Daiwa 6 Month – 10 Year Fixed Interest Fund guarantees to return a rate between 4.43% and 7.60% per year, for the lifetime of the Fund depending on the term. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
Our Fixed Interest Fund works the same as a Fixed Income Fund. This is a professionally managed investment fund that pools money from a large number of investors to buy a variety of securities, such as stocks, bonds, money market instruments or other securities. When you buy a share in a Fixed Interest Fund, you own a portion of all the investments in that fund. If you’re a beginner investor or prefer to take a handsoff approach, it’s worth considering how Fixed Interest funds can help you reach your investment goals. There are several types of Fixed Interest funds, in this case we are offering a fixed income or bond fund. A bond fund, also known as a Fixed Interest Fund, is a type of mutual fund that is made up of bonds and other types of debt securities, such as government bonds, municipal bonds, and mortgage-backed securities. Fixed income funds are not susceptible to market volatility and provide a guaranteed fixed rate of return. The Daiwa 6 Month – 10 Year Fixed Interest Fund guarantees to return a rate between 4.43% and 7.60% per year, for the lifetime of the Fund depending on the term. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
Our Fixed Interest Fund works the same as a Fixed Income Fund. This is a professionally managed investment fund that pools money from a large number of investors to buy a variety of securities, such as stocks, bonds, money market instruments or other securities. When you buy a share in a Fixed Interest Fund, you own a portion of all the investments in that fund. If you’re a beginner investor or prefer to take a handsoff approach, it’s worth considering how Fixed Interest funds can help you reach your investment goals. There are several types of Fixed Interest funds, in this case we are offering a fixed income or bond fund. A bond fund, also known as a Fixed Interest Fund, is a type of mutual fund that is made up of bonds and other types of debt securities, such as government bonds, municipal bonds, and mortgage-backed securities. Fixed income funds are not susceptible to market volatility and provide a guaranteed fixed rate of return. The Daiwa 6 Month – 10 Year Fixed Interest Fund guarantees to return a rate between 4.43% and 7.60% per year, for the lifetime of the Fund depending on the term. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
Disclaimer:All investments have risks. You should not invest unless you are prepared to sustain a loss of your invested money plus any commission or other transaction charges. The listing of products above should not be considered an endorsement or recommendation to invest. The listed products and their price or yield are subject to availability and market cut-off time. Investments in debt securities are subject to risks. Read all the offer related documents carefully. Please consider your specific investment requirements, risk tolerance, performance of the Issuer, risk and reward ratio etc. before choosing a security that suits your need. AU Bond Trust strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decision.
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