Reviewer: Darren

Hi, I am on a 28% PIR rate and my partner's PIR rate is 10.5%. If I join CAF with joint account, what is the tax rate and is there any tax benefits?

Jill Rudings, Customer Service Manager: For information regarding PIE tax and the election of a PIR we recommend you read our FAQ on the subject or visit the IRD website. We can not advise you which tax rate to elect when creating an account. The above links should provide you with enough information to make the correct election, if not we recommend you contact your accountant or tax advisor.

When creating a joint account only one IRD number is required and this will be the IRD number we use to report to the IRD. There is more information on how the CAF works and the benefits associated with investing in this product on the CAF section of our site.

Reviewer: Brucemerrett

The cash advantage fund offers a lower rate than the TSB cash pie...I guess thats because it is a lower risk investment.

Mike Heath: Bruce, the rate we offer for the Cash Advantage Fund (CAF) is significantly influenced by the competitive forces. When compared to similar products from the major retail banks our rate of 3.60% for the CAF is higher than all other major banks other than the rate offered by BNZ.

Reviewer: Brandon

I am on a 10.5% tax rate. Am I better off if I invest in cash advantage fund or 6 month to 1 year time deposit?

Reviewer: Patricia

I am on a 33% tax rate. Am I better off investing in 1 year term deposits or cash advantage fund?

Mike Heath: Patricia, with the Cash Advantage Fund @ 3.50%, and your PIR rate of 30%, the tax effective rate is approximately 3.71% whereas the rate for the 1 year TD is 5.60. On this basis you would earn more interest from the 1 year TD.

Reviewer: Craig Stewart

You are showing the comparative effective rate (for a person on a 38% marginal tax rate) for BNZ's Cash Pie as 3.90% pa. However the BNZ website shows their effective rate as 4.01% pa. That's quite a big difference. Who is correct on the BNZ rate?

John Baird - Operations Manager: Hi Craig, the figures you quote are from the schedule of the base rates on offer, not the effective rate. Please refer to the "compare" page where you'll find the detail.

Reviewer: Mike

some of your rates here are not correctly stated and you might want to fix them

Mike Heath: Mike thanks for pointing that out. We’ve updated the tables/charts accordingly.

Reviewer: Andy

RaboPlus, Can you please let me know why you are not offering the same headline interest rate across your savings products - ie, 3.6% in your Savings Account and Cash Advantage Fund, as other banks do? It seems RaboPlus is effectively taking the margin on the tax payer's savings entitlement, but I could be wrong. Many thanks

John Baird - Operations Manager, RaboPlus: Hi Andy, the underlying investments of the two products are different and reflect the nature and activity of the investors using them. The bank derives no direct benefit from an individual’s tax rate.

Reviewer: Ann Schofield

Dear RaboPlus Could you clarify for me please whether I will get most interest in my Master Account (3.6%) or the Cash Advantage Fund (3.15%, with effective interest at 3.6% if in 38% tax bracket). Thanks Ann

Mike Heath: Ann the results would be near to exactly the same in the scenario you describe.

Reviewer: Rick

I am keen to see your reply to Peters question written on 23 rd August - the fund also seems pointless to me.

Mike Heath: Rick, my apologies as I thought I had responded to this already. The Cash Advantage Fund offers a number of benefits, other than the straight PIE tax benefit for those on a RWT of 38%:

• The interest calculation is more favourable than traditional On Call account because it compounds daily Monday to Thursday and is simple daily for Friday to Sunday, whereas traditional On Call accounts and the cash PIEs of some of the other banks, use simply the daily interest calculation 

• Because we don’t pay out interest on a monthly basis, like a traditional On Call account, you get a deferred tax benefit. We only deduct tax when you sell units or at the end of the tax year so you get the benefit of interest on this deferred tax. 

• Whilst not specific to the Cash Advantage Fund, under the PIE regime it is possible to earn more income over and above the 19.5% tax threshold yet still remain at 19.5%.

Once again apologies for having not answered this sooner.