term deposit - tax implications

[sawf]

I need to keep my interest earned by a cash deposit down this financial year if possible.

if i transfer to a 6 month term deposit with interest paid on maturity (ie maturing July) will any interest earned by this count for 2007/2008 financial year? or will i just have a big start to 2008/2009 tax year?

Would it be unwise to lock cash away right now with the uncertainty in world financial markets?

please don't take this as requesting financial advice, just not sure of the law.

cheers

sawf

 

[Rob]

You're taxed on interest when you receive it. So if the deposit matures in July 08, you don't need to declare it until 2009.

And if you're worried about losing your money, I wouldn't be concerned if you give it to an Australian bank. Just don't get sucked into high interest debentures and the like that some finance companies offer.

 

[sawf]

thanks for the quick reply Rob

cheers

sawf