Westpac New Zealand Limited

Guiding you to bank with confidence.

8 SmartmoNeytIPSFor NeW ZeaLaNDerS

to all our customers

Global financial issues have made many

headlines of late, understandably prompting

some of you, our customers, to share your

concerns with us. We’d like to take this

opportunity to reassure all of you that we

are a strong, solid bank that you can depend

on. At Westpac you can save and invest

with confidence – knowing that we are well

positioned to meet the challenges of the

current global environment as well as local

economic conditions, and that Westpac

New Zealand Limited has a guarantee

under the New Zealand deposit

guarantee scheme.

We are a strong bankWestpac New Zealand has continued to have strong customer growth. We’ve been looking after New Zealanders’ money since 1861 and, as part of Westpac Banking Corporation, we are currently one of only 17 banks in the world with a solid AA credit rating*. Our capital position is robust, significantly exceeding the Reserve Bank of New Zealand’s requirements, and we have substantial holdings of liquid securities and undrawn funding lines at our disposal.

you can save and invest with confidenceOur focus on meeting the needs of New Zealanders, and our disciplined approach to managing risk means that we have no direct exposure to US sub-prime mortgages. When many financial institutions around the world were investing in exotic securities, including US sub-prime mortgages, we chose not to. And just in case you still harboured any concerns, Westpac New Zealand Ltd has

a guarantee under The New Zealand deposit guarantee scheme. We are also the bank of the New Zealand Government and have been since 1989.

New Zealand’s banking system is in good shapeWhile our economy has retreated through much of 2008 and the global picture does not look promising for 2009, I am confident that the fundamentals of the New Zealand economy remain sound. Within that we have a robust banking system. We are well regulated, and the Reserve Bank of New Zealand has been active in its responses to the dynamic market conditions. This includes the significant reduction in interest rates in October, as well as the Reserve Bank announcing a variety of initiatives to ensure there is sufficient liquidity in the banking system.

you can trust our experienceWe’ve seen difficult times before, so you can trust our experience to navigate safely through these times. We’ve helped millions of customers over the years by advising, reassuring and managing their business responsibly. We’ve been here through wars, recessions, droughts – helping generations of customers achieve their financial goals in good and bad times.

We are here to helpWestpac employs over 5,000 people dedicated to giving you support and advice for your business and personal financial needs. In every Westpac branch and business banking centre across New Zealand there are highly experienced people you can talk to about how we can help you save and invest with confidence. That’s what we’re here for.

Thank you for your continuing support.

Bruce McLachlan, Acting CEO Westpac New Zealand.

* The ‘AA’ rating is assigned to Westpac New Zealand Limited with

respect to its long term senior unsecured obligations. Ratings are

subject to change. For the latest ratings information please visit

www.standardandpoors.co.nz

ContentsPage

03 Can I still trust banks with my money?

05 How do I get the best deal on my savings?

07 Is it wise to always chase high interest rate offers?

09 How can I get better at budgeting?

11 Are there benefits with having my banking in one place?

13 Is there an investment expert I can speak to who will help me make decisions?

15 I’m stretched by making too many monthly repayments – what can I do?

17 Ways to make your home loan repayments more manageable.

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01Stay calm and know the facts.

The United States is such a dominant global

player that when it’s in crisis, the whole

world watches. It’s important to remember,

in times of uncertainty, New Zealand’s

banking system remains in a strong position.

Can I still trust banks with my money?

It’s not, therefore, a time to make hasty decisions – it’s a time to stand back and look at the facts:

As a New Zealand banking institution, Westpac is well regulated, well capitalised and profitable.

Westpac New Zealand Limited has a guarantee under the New Zealand deposit guarantee scheme.

Westpac are the bank of the New Zealand Government, and have been since 1989.

Westpac New Zealand as part of Westpac Banking Corporation is currently one of only 17 banks worldwide to have Standard & Poor’s AA rating*, reinforcing our strong capacity to meet all of our financial commitments.

When financial institutions around the world were buying and selling US sub-prime mortgages, we chose not to – we have no direct exposure to the US sub-prime market.

History shows the market will recover; in the last 25 years there have been six serious market downturns.

To provide you with added confidence, Westpac has been looking after New Zealander’s investments since 1861 – so we have the experience and the knowledge.

our smart money tips

• Staycalmandcontinueto bank confidently.

• Sticktothemostreputable,establishedand stable financial institutions.

• Avoidmakingrashdecisionsortakingaction until you have spoken to a qualified financial Investment Adviser.

For more information speak to one of our Consultants at your local Westpac Branch, or ask to speak to one of our qualified Investment Advisers. Or visit

www.westpac.co.nz

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02review your accounts to ensure you have the right account to meet your needs.Savings products have flooded the market

over the last few years; interest rates have

undergone significant fluctuations as well, so

it wouldn’t be a surprise if you’re wondering

where you should currently be saving – to

get yourself the best possible deal.

How do I get the best deal on my savings?

our smart money tips

• Checkwithyourbankaboutwhattype of savings account you have.

• Beopentohavingmultiplesavingsaccounts – one for short-term access, one for medium and one for long-term goals.

• Ifyoudon’tneedreadyaccesstosomeofyour savings, you may like to consider a fixed rate account with no set-up, monthly service or management fees to help maximise your return.

talk to one of our skilled staff at your local Westpac branch, who can help you select the right accounts for your needs. For information on the types of accounts we have available go to

Hot tip Having all your savings accounts with one bank could mean you benefit from a single online view of all your accounts as well as no delays with transfers between accounts.

Just remember, while there are many different savings accounts on the market, they generally fall into two main types

1. those that offer higher interest with more limited access

2. those that offer higher access and earn lower interest

‘access to interest rate’ balance

% Lower Interest

% Higher Interest

Instant access Some access Locked

eg. Day-to-Day and savings accounts

•Baseinterest.

•Someofferbonusinterest for monthly deposits.

•Accessviabranch,online, telephone, ATMs and EFTPOS.

eg. Online savings accounts

•Solidreturns.

•Accessviainternettransfer to a linked account.

eg. Term Deposits

•Solidreturns.

•Fixedforanagreedperiod.

www.westpac.co.nz

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03Weigh up your short-term deals by more than just their rate.

Short-term interest rate offers can be a

predictable and attractive way to make

your money work harder for you, however –

especially in today’s market – it makes sense

to consider more than just the rate.

Is it wise to always chase high interest rate offers?

more than ever, it’s important to look at the provider as well as the products when selecting short-term deposits with attractive interest rates.

Questions to ask may include:

Does the provider have a long-term proven track record?

What about after the offer ends?

Can they provide me with an integrated range of competitive banking products that I can put my deposit into once it’s matured?

What are the penalties if I end up needing to access my funds before maturity?

Speak to a Westpac Consultant or one of

our qualified Investment Advisers at your

local branch for information about our full

range of savings and investment products,

the different level of access available and

the features that make managing your

investment or account easier.

our smart money tips

• Continuetobenefitfromshort-term rate-based deposit offers.

• Onlyconsidersuchofferswhentheycome from reputable financial institutions.

• Considerfactorssuchasproduct range and withdrawal options, as well as the rate, when considering short-term deposits.

Visit your local Westpac Branch or go to

www.westpac.co.nz for more information.

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04Use our range of comprehensive tools to help you with your budgeting.

There’s nothing more important to your

financial wellbeing than mastering the art of

budgeting – and with the current economic

climate, there’s never been a better time to

pause, take stock and use a budget to help

improve your financial confidence.

How can I get better at budgeting?

the good news is, there are now user-friendly online tools that make setting a budget easy, and sticking to it even more satisfying. Westpac, for example, offers an online budgeting tool as part of online Banking. you enter the details of your income and costs, press ‘calculate’ and the tool:

Calculates any surplus or shortfall in your finances.

Refers you to the relevant areas of the bank eg. financial planner for investment options (if there’s a surplus) or advice on reducing your expenses (if there’s a shortfall).

The online calculator can be found at www.westpac.co.nz under calculators and guides.

If you would like to learn more about budgeting we offer an online budgeting tutorial, “Managing Your Money”. This can be found at www.westpac.co.nz/money

We offer free money management workshops to a wide range of groups throughout New Zealand. We work with organisations such as schools, employers and churches to help them develop effective money management skills for their people. Managing Your Money workshops are fun, interactive and impartial. If you think your group, class or workplace might benefit from a Managing Your Money workshop, please let us know by registering at managingyourmoney@westpac.co.nz.

our smart money tips

• Trythelatestonlinebudgetingtoolsatwww.westpac.co.nz and aim to succeed where you may not have been so good in the past.

• Whensettingabudget,gofromessentialitems (like rent, mortgage and transport) to extras (like entertainment, birthdays and holidays).

• Talktoabankingspecialistorfinancialplanner if you need help.

For advice about what budgeting options might be best suited to you, speak to one of our skilled staff at your local Westpac Branch. or, for more information about our budgeting tools visit the financial literacy section of our website at

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www.westpac.co.nz

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05the benefits of banking in one place.

How many financial institutions do you have

accounts with now? Two or three? More than

that? In an attempt to ‘shop around’ for the

best banking deal, many New Zealanders

end up spreading their banking amongst

multiple institutions.

Are there benefits with having my banking in one place?

An approach that could benefit you more, however, is to explore the benefits of banking with one bank. There are the convenience factors to consider – transfers between accounts could become instant, and you could see your full banking picture in one place, via internet banking. You may also be able to negotiate lower fees and other benefits in return for your banking loyalty.

Benefits• Valuablecustomer–strongpositiontonegotiate

favourable terms.

• Transfersbetweenaccountscouldbeinstant(noovernight delays).

• Potentiallylowerfees.

• Keepup-to-datewithyourfinancialpositionacross all accounts using online banking.

Salary Deposit

Main Transaction

Savings Account 1

Savings Account 2

Home Loan Debit Card

KiwiSaver Credit Card

our smart money tips

• Considerbankingwithastrong,reputableprovider like Westpac, who can offer you benefits for doing so.

• Askyourbankinginstitutiontotakeanintegrated look at your banking. Seek benefits in return for committing your complete banking business to them.

• BeopentousingOnlineBankingand avoid using other banks’ ATMs to help minimise your transaction costs.

to find out how a complete, integrated suite of banking products from Westpac could benefit you, speak to one of our skilled staff at your local Westpac branch.

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06Invest with confidence.

Over the last 12 months, investors have

witnessed some of the most extreme market

conditions in recorded history. Many New

Zealanders have only been able to watch as

global markets lose value, and they possibly

see thousands wiped off their investments

– a disconcerting and frustrating experience

for anyone, especially those who rely on

their investments as a source of income.

Is there an investment expert I can speak to who will help me make decisions?

Whatever your investment timeframe and goals, one thing is vital in these times and that’s to avoid taking rash or uninformed action. As an investor, we believe it’s important to remain focused on your long-term investment horizon, and not get too caught up in short-term market movements.

With that in mind, it is essential that you revisit your investment objectives, your invest time horizons and the many different purposes that your investments will be put to. It is also important to understand your personal risk profile, how you feel about your investments and possibility of volatility in your investment returns.

There have been plenty of major market events over the last twenty years that have hurt global financial markets, but they inevitably recovered with time. History and investment fundamentals demonstrate that over an extended investment period, a soundly managed fund will typically go up and generate a positive return and that a well diversified portfolio is a good option to help protect your investment through weaker market movements and enhance the returns of your investment over the lifetime of your portfolio.

our smart money tips

• Talktoaninvestmentadviseraboutthebest investment strategy for you.

• Planforyoursuccessbygettingacomprehensive financial plan.

• Askforregularreviewsonyourinvestments and revisit your short, medium and long-term financial goals with your investment adviser.

• Don’tpanic,andensureyougetadvicefrom a qualified Investment Adviser who can take into account your individual financial needs and objectives.

Ask to speak to one of our skilled and qualified Investment Advisers at your local Westpac branch, or visit www.westpac.co.nz/investments for details on who your local Investment Adviser is.

Hot tip Global markets and the economic environment are changing daily, so before making any changes to your investment strategy ensure you talk to a skilled and qualified Investment Adviser. They can work with you to understand your financial needs and goals, and make recommendations based on your individual circumstances.

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07Consolidating your debts could help you save on interest.

Borrowing for most people is a fact of

life. From the day of your first permanent

job to the day you retire, you’ll receive a

multitude of offers for credit cards, store

cards, personal loans, home loans, and

other lending facilities – which can all offer

benefits at various stages of your life.

I’m stretched by making too many monthly repayments - what can I do?

Taking a haphazard approach to how you borrow money, however, can mean your loans end up becoming more burden than benefit – draining your finances heavily and unnecessarily over time.

If you have more than one credit card, loan or store card, it’s smart to consider consolidating them into fewer facilities, or even just one.

No single debt consolidation approach will fit every situation. a Westpac consultant can:

Recommend products and a borrowing approach that best meets your practical needs and is cost effective.

Refer you to a Westpac Home Loan Expert to see whether consolidating debt to your home loan would be a suitable strategy for you.

Help by suggesting ways you can simplify your debt and repayments.

our smart money tips

• Considerconsolidatingyourdebtsintoone

Westpac personal loan. Take control of your

finances with one easy regular payment, and

get out of debt faster with an agreed time to

have it paid off. For more information visit

www.westpac.co.nz/personal loans

• Youcouldalsocheckouthowyoucouldsave

on interest charges by transferring your existing

debts (such as other bank credit cards, hire

purchases or loans) to a Westpac credit card.

There’s a handy balance transfer calculator on our

website at www.westpac.co.nz under calculators

and guides.

a Westpac Consultant can• helpbysuggestingwaysyoucansimplifyyourdebts

and repayments

• recommendproductsthatmeetyourindividualneeds

• helpyousetuppaymentstogooutthedayafteryouare paid, and help avoid late payment penalties or fees.

For advice on ways to help with debt consolidation talk to a Westpac consultant at your nearest Westpac branch, or visit

www.westpac.co.nz for more information.

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08talk to a Westpac Home Loan expert about a lending review.

It’s important to pick a fixed term and loan

structure that suits what you want to do

with your loan. So it’s worthwhile talking

with one of our Home Loan experts at your

local Westpac branch, or a Mobile Mortgage

Manager about the options available. You

may be able to save money over time, or

minimise the repayments on your loan.

Here are some ways to make your home loan repayments more manageable.

minimising repaymentsIf keeping your repayments as low as possible is important to you right now, then here are a few useful tips.

Think about extending the term of your loan out to 30 years if this has not already been done.

It may be possible to change your fixed rate loan to interest-only for a period.

If you have any other debt, it may be possible to save money by consolidating it into your home loan at a lower interest rate.

If a break from your regular repayments for up to three months would help get you back on track, then you can talk to us about a payment holiday. However, interest still accrues on your loan during this time.

Use your Home Loan as your everyday account With Choices Everyday you can use the same account for your loan and all your other banking. Your income is paid into your account and you can put money in and take money out as you want. Your loan is on a floating rate so you can pay it off whenever you like before the end of the loan term. You may even be able to stop making payments for a while, or take extra money out if you’re within your loan limit. Having one account for everything means you could pay less interest overall, because your money stays in your Choices Everyday account right up until you need it. You can even use this in conjunction with your credit card to maximise the interest savings each month.

other considerationsIf you’re considering breaking a fixed rate loan, or making a lump sum payment, make sure you take potential break costs into consideration. It’s possibly more cost effective to wait until the fixed rate rolls over.

our smart money tip

• Haveaportionofyourloanonafloatingrate. This gives you some flexibility to pay off debt in lump sums and possibly save on interest. Leave the rest on fixed rate terms which normally have lower interest rates than home loans on floating rates. Don’t put all of your loan into just one fixed rate term. Staggering your terms can smooth out changes in your repayment amounts over time.

talk to a Westpac Home Loan expert about

• homeloanswithfeaturesthatarespecificallydesignedto help you save on interest and pay off your home loan faster

• adviceonwhetheryourcurrentlendingcouldbestructured to better meet your needs.

to arrange an appointment with one of our Home Loan experts or a mobile mortgage manager visit your nearest Westpac branch.

or, visit the housing section of our website at www.westpac.co.nz/housing to find your nearest mobile mortgage manager.

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Grow your financial confidence by banking with Westpac – talk to us today.

It’s not just saving in challenging times

that we can assist you with; you can also

benefit from Westpac’s strength and service

for all your banking, investing and financial

planning needs.

Visit your local Westpac branch and speak to

one of our skilled staff or ask to speak to one

of our qualified Investment Advisers. They’ll

help by providing you with the right advice

and solutions to meet your individual needs.

Or for more information visit:

www.westpac.co.nz

Terms and conditions apply to Westpac products and services. For more details, refer to www.westpac.co.nz. Westpac’s current credit card lending criteria apply to all credit card applications and transfers. Westpac’s current lending criteria apply to all applications for finance.

Further information about the deposit guarantee scheme is available, free of charge and at all reasonable times, on the internet site maintained by, or on behalf of Treasury.

* The AA rating is assigned to Westpac New Zealand Limited with respect to its long term senior unsecured obligations. Ratings are statements of opinion not statements of fact or recommendations to buy, hold, or sell securities. Ratings are subject to change. For the latest rating information please visit www.standardandpoors.co.nz

Disclosure statements for Westpac advisers are available on request and free of charge from any Westpac adviser.

You can get a copy of the current disclosure statement for Westpac New Zealand Limited and a copy of the investment statement for any securities for which an investment statement is required from any Westpac branch in New Zealand free of charge. Westpac New Zealand Limited.

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