Great Committee questions shared: Best interest rates for Body Corporate term deposits

Sharing great questions from our committee members and owners helps people better understand their Body Corporate.

Chairperson question:

“Thank you for providing the Macquarie Bank term deposit rates for Body Corporate term deposits as at 12 October 2022. 3.45% p.a. for a 12 month term deposit under $1 million....

Macquarie Bank's term deposit interest rate is 3.4% for 12 months under $1 million – can our Body Corporate get the higher rate of 3.8% advertised by Macquarie Bank online?

The (Nuu) Co answer:

Macquarie has now confirmed that in their website ‘fine print’ the 3.8% 12-term deposit rate is only available to Macquarie Personal Banking Clients.

Your Body Corporate’s term deposit account would be classified as a Business Banking account. This means that the 12-month term deposit rate is 3.4% as set out in the interest rate table for business bank accounts circulated with the committee notice of motion.

Can our Body Corporate currently open a term deposit with Judo Bank?

The (Nuu) Co answer:

We have telephoned Judo Bank Pty Ltd who have advised that it currently only provides term deposits to Personal Banking Clients.

So at present, it appears that your Body Corporate is not able to open a Judo Bank term deposit (as your Body Corporate is considered to be a business banking client).

Judo Bank’s customer service representative advised that by the end of 2022, Judo Bank has the goal to also offer term deposits to business banking clients.

Is our Body Corporate’s money in a term deposit account insured by the Australian Financial Claims Scheme?

The (Nuu) Co answer:

We have checked that both Macquarie Bank Limited and Judo Bank Pty Ltd are both listed as authorised deposit taking institutions covered by the Australian Financial Claims Scheme (AFSC) (that protects money in a bank account up to $250,000 held by an account holder).

What are our Body Corporate’s obligations when investing?

The (Nuu) Co answer:

On your great question about the Body Corporate’s obligations when investing: a Body Corporate in Queensland may invest amounts not immediately required for its purposes in the way a trustee may invest trust funds (s.96). Any interest from an investment must be paid into the sinking fund.

A really helpful Adjudicator’s decision involving Southport Central in the Gold Coast was issued in September 2022. Essentially, a Body Corporate must invest the way a ‘trustee’ would invest (reasonably and prudently).

An extract of the helpful paragraphs about a Body Corporate’s duty when investing money not immediately required for its purposes is below:

The above advice is provided as general information only and is effective as at the date of this article 13 October 2022. All [personal information] has been redacted to protect privacy. The above information does not constitute legal or financial advice. Applies to Queensland bodies corporate only.