National Australia Bank Limited (NAB) (AFSL and Australian Credit Licence 230686) is the issuer of NAB Flexi Deposits.
Terms defined in the Product Disclosure Statement dated 26 October 2011 for NAB Flexi Deposits have the same meaning on this page.
What is a NAB Flexi Deposit?
The NAB Flexi Deposit is a term deposit issued by NAB where the total Term is divided into two periods, one in which you earn a Fixed Rate and one in which you earn a Floating Rate.
When you invest in a NAB Flexi Deposit, you choose (subject to requirements set out in the PDS) the:
1. Principal Amount you intend to deposit;
2. Term of your deposit;
3. order of the Fixed Rate and Floating Rate periods; and
4. length of each of the Fixed Rate and Floating Rate periods.
The Fixed Rate and the Floating Rate Margin that will apply in respect of the Floating Rate period are set by NAB at commencement and remain unchanged for the Term of your deposit.
You can also choose (subject to limits we advise) how to structure your interest return between your Fixed Rate and Floating Rate periods. This feature gives you greater flexibility in managing your interest income.
NAB Flexi Deposits have the following benefits:
1. Potential for improved returns – by committing to the longer combined Term you have the potential, depending on market conditions, to earn a higher interest rate during at least one of the periods than you would have received if you acquired a separate term deposit for each period. |
2. Tailored returns – you can tailor a NAB Flexi Deposit to help suit your situation or your view on the direction of interest rates by: – selecting the Term of your deposit; – choosing the order and length of the Fixed Rate and Floating Rate periods; and – deciding how to structure your interest return over the Term between your Fixed Rate and Floating Rate periods. |
3. Certainty – regardless of the order of the Fixed Rate and Floating Rate periods, the Fixed Rate and Floating Rate Margin are locked in at commencement of your deposit. |
4. Peace of mind – like other NAB deposits, your NAB Flexi Deposit is a liability of one of Australia’s key financial institutions and is subject to statutory priority. |
NAB Flexi Deposits have the following key features:
Term | One year to ten years, in quarterly increments. The total term is divided into two periods, one in which you earn a fixed rate and one in which you earn a floating rate. |
Minimum investment | A$50,000 |
Payment of interest | Interest on NAB Flexi Deposits is paid in arrears on a quarterly basis. The Fixed Rate and Floating Rate Margin used to calculate Interest Payments are set on the Commencement Date of your NAB Flexi Deposit. If your Floating Rate period is first, your Floating Rate for the first quarter will also be set on the Commencement Date. The Floating Rate for each other quarter in your Floating Rate period (and the first quarter of your Floating Rate period if you selected this to come after your Fixed Rate period) will be set on the Payment Date coinciding with the commencement of the quarter. |
Cooling off period | There is no cooling off period for a NAB Flexi Deposit. |
Certain key information about NAB Flexi Deposits is outlined in this website. You must read the Product Disclosure Statement (PDS) in its entirety and you should seek independent legal, financial and tax advice to determine if an investment in a NAB Flexi Deposit is right for you.
Download a copy of the PDS and SPDS.
Download a copy of the Financial Services Guide (FSG).
Why would you consider a NAB Flexi Deposit?
The NAB Flexi Deposit gives you flexibility to use both fixed and floating interest rates to implement your view on the direction of interest rates over a particular period without completely giving up either the:
• certainty of fixed rates; or
• potential benefit of a floating rate.
For example, if you wish to invest in a 4 year NAB Flexi Deposit and you want income certainty in the shorter term, but also believe interest rates will rise in the future, you may choose a Fixed Rate for the first 2 years and a Floating Rate for the second 2 years.
How it works:
Step 1 – Consider the PDS, complete and submit the Application Form
It is important you consider all the information in the PDS and your personal circumstances when making a decision about the NAB Flexi Deposit.
If you wish to proceed with one or more NAB Flexi Deposits, you must complete and submit the Application Form. If we accept your Application Form, we will rely on it for all NAB Flexi Deposits you acquire from us until we notify you otherwise or we accept a new Application Form from you.
Step 2 – We will contact you or your Nominated Representative and provide you with an indicative Fixed Rate and Floating Rate Margin
We will contact you or your Nominated Representative to obtain your preferences concerning:
• the name in which the NAB Flexi Deposit is to be held;
• the Principal Amount;
• the Term;
• the length of each of the Fixed Rate and Floating Rate periods; and
• the order of each of the Fixed Rate and Floating Rate periods.
Using these details, we will then contact you or your Nominated Representative with an indicative Fixed Rate and an indicative Floating Rate Margin that will apply in respect of the Floating Rate period. You can also let us know at this time whether you would prefer a different Term, Principal, or order of Fixed Rate and Floating Rate periods, and we will re-calculate indicative Fixed Rates and Floating Rate Margins accordingly.
A benefit of NAB Flexi Deposits is that you can choose (subject to limits we advise) how to structure your interest return between your Fixed Rate and Floating Rate periods. Depending on market conditions, you have the potential to increase your Fixed Rate and lower the Floating Rate Margin, and vice versa. We can discuss this feature and your preferences when you contact us.
Step 3 – If you choose to proceed, your final Fixed Rate and Floating Rate Margin are set, and your NAB Flexi Deposit commences
After we have agreed with you (or your Nominated Representative) all of the relevant variables for your NAB Flexi Deposit (being the Principal Amount, the Term, the order and length of the Fixed Rate and Floating Rate periods, and the applicable Fixed Rate and Floating Rate Margin), we will ask for an instruction to issue a NAB Flexi Deposit on those terms.
We will arrange your NAB Flexi Deposit upon receiving you or your nominated representative’s verbal instruction.
The Fixed Rate and Floating Rate Margin are set at the Commencement Date and will remain the same for the Term of your NAB Flexi Deposit until its Maturity. If your Floating Rate period is first, your Floating Rate for the first quarter will also be set on the Commencement Date. The Floating Rate for each other quarter in your Floating Rate period (and the first quarter of your Floating Rate period if you selected this to come after your Fixed Rate period) will be set on the Payment Date coinciding with the commencement of the quarter.
On the Commencement Date, if you so elect, we will debit the Principal Amount from the bank account nominated in your Application Form. You may also pay the Principal Amount directly into an account nominated by NAB. We will confirm the Commencement Date for your NAB Flexi Deposit, and all other key commercial terms, in the Confirmation we provide you, which you should check carefully. You must contact us within one Business Day of receiving your Confirmation if you believe there are any errors.
Step 4 – We pay quarterly Interest Payments on your NAB Flexi Deposit
We will pay you quarterly Interest Payments on each Payment Date during the Term of your NAB Flexi Deposit. Interest Payments will be made to the bank account you nominate in your Application Form, and are calculated using the following formula:
Interest Payment = P x R x (D/365)
P = Principal Amount
R = Fixed Rate or Floating Rate (as applicable)
D = number of days in the period (since but not including the last Payment Date, or Commencement Date in the case of the first Interest Payment)
The Floating Rate is calculated by adding the Floating Rate Margin to the Reference Rate (which will rise and fall during your term in accordance with interest rate market movements).
The Reference Rate is the 3 month Australian Bank Bill Swap Rate (3M BBSW). This rate is widely used in the Australian market as a reference rate for pricing of wholesale deposits and loans. Note that 3M BBSW is different from the Reserve Bank of Australia’s official cash rate.
Step 5 – We contact you prior to Maturity to determine if you wish to reinvest
Prior to maturity your NAB representative will contact you to discuss what you would like done with your Principal Amount at Maturity. You could also call us to discuss this.
Step 6 – Your NAB Flexi Deposit matures – unless you have elected to reinvest, we will arrange your final payments
Unless you provide us with reinvestment instructions, following Maturity we will transfer the Principal Amount to you with any final Interest Payment.
Payment of your Principal Amount will be made to the bank account you nominate in your Application Form (unless we have confirmed to you in writing that we will make payment to another account you have nominated).
Key Risks
You should carefully consider the risks set out below before investing in a NAB Flexi Deposit. We have highlighted some key risks below but these may not be the only risks faced by an investor. You should seek independent legal, financial and tax advice to determine if an investment in a NAB Flexi Deposit is right for you.
1. Market risk Interest rates may not move in accordance with your views at the time of structuring and establishing your NAB Flexi Deposit. |
2. Early withdrawal costs The NAB Flexi Deposit is designed to be held until Maturity. Early withdrawal costs may be incurred if you vary or terminate your NAB Flexi Deposit before the end of the Term. It is possible that costs associated with early withdrawal will result in you receiving back a net amount that is less than your Principal Amount or Requested Withdrawal Amount (as applicable). |
3. Potential conflicts of interest We and our related bodies corporate may conduct transactions as principal and as agent that may (positively or negativel) affect the market price of your NAB Flexi Deposit. |
4. Credit and payment risks You may suffer loss if we fail to pay you amounts as required or fail to properly perform our other obligations under your NAB Flexi Deposit. |
5. Change to law Laws and regulations may change during the term of your NAB Flexi Deposit that could adversely affect the return you receive, or have other negative consequences. |
You must read the PDS, NAB’s Financial Services Guide and NAB’s privacy policy in considering whether to acquire a NAB Flexi Deposit.
Important Information
The information contained in this website is published by National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 (NAB). The NAB can be contacted by calling telephone banking on 13 10 12.
NAB Flexi Deposit is issued by NAB and is offered on the terms of the Product Disclosure Statement dated 26 October 2011. You can obtain a copy of the PDS here and you should consider it in making any decision concerning NAB Flexi Deposits. NAB Flexi Deposits can only be acquired on the application form attached to the PDS.
The information contained in this website is of a general nature only. The information contained in this website has been prepared for the purpose of providing general information only without taking account of any particular investor's objectives, financial situation or needs and is not an offer to sell, or solicitation of an offer or a recommendation to buy any financial product and is not intended to be a complete summary or statement of the NAB Flexi Deposit. The information contained in this website is not a product disclosure statement and it does not contain all of the information that such a product disclosure statement is required to contain. An investor must, before making any investment decisions, consider the full details set out in the PDS and seek professional advice, having regard to the investor's objectives, financial situation and needs.
If you invest in a NAB Flexi Deposit, the NAB or any of its related bodies corporate (NAB Group) may receive remuneration or other benefits in relation to your investments as specified in the PDS.
NAB voluntarily subscribes to the Code of Banking Practice which lays down standards of good banking practice for dealing with small businesses and individuals. A copy of the Code can be obtained by calling 13 10 12.