How Spicers Premium Plus Can Work For You
The following example highlights how a $100,000 investment at 8.25% over a one year period performs with a 33% or 39% tax rate, and shows the benefits of investing in Spicers Premium Plus* when compared to a traditional bank term deposit earning a rate of 8.25% p.a.1
| 39% Marginal Tax Rate |
33% Marginal Tax Rate |
|
Traditional Bank Term Deposit |
Spicers Premium
Plus* |
|
Traditional Bank Term Deposit |
Spicers Premium
Plus* |
| Taxable Income |
$8,250 |
$8,569* |
Taxable Income |
$8,250 |
$8,569* |
| Tax |
$3,217 (39%) |
$2,571 (30%) |
Tax |
$2,723 (33%) |
$2,571 (30%) |
| Net Income |
$5,033 |
$5,998 |
Net Income |
$5,527 |
$5,998 |
Effective Rate
(after tax) |
5.03% |
6.00% |
Effective Rate
(after tax) |
5.53% |
6.00% |
*Spicers Premium Plus is a unit trust returning income. The taxable income for Spicers Premium Plus in the example is based on a return of 8.25% p.a. accrued daily and assumes income is compounded monthly over a one year period. The example returns are given for illustration purposes only. The rate of return for Spicers Premium Plus will vary from time to time. The example above shows that investing in Spicers Premium Plus on the 39% marginal tax rate will provide a net return of $965 more per annum than an investment in a traditional twelve month bank term deposit. This translates into a 19.2% greater return and means that you will pay 20.1% less tax on your investment income. To obtain the same return the bank term deposit would need to be paying 9.83% p.a.
Further, if you were on a 33% marginal tax rate Spicers Premium Plus provides a net return of $471 more per annum than an investment in a traditional twelve month bank term deposit, in the example above. This translates into an 8.5% greater return and means that you will pay 5.6% less tax on your investment income. Once again to achieve the same return from the bank term deposit, it would need to be paying 8.95% p.a.
Spicers Premium Plus is an ideal place to hold your money while deciding on your on-going investment strategy, or as a cash investment which provides easy access to your money as well as generating a competitive return.
Have a look at the list of benefits on the next page.
The Spicers Premium Plus Investment Statement and Application Form are available here.
The Spicers legal disclosure statement is available on request and free of charge by contacting Spicers on 0800 777 802,
or by email at spicers@spicers.co.nz. Alternatively, a copy of the legal disclosure document can be downloaded here
1 Refer to ‘Monthly Compounding Effect’ in the Getting started with Spicers Premium Plus table»