CASH MANAGEMENT ACCOUNTS FAQS

CIP Cash Management Accounts provide a convenient means of holding cash within your investment portfolio. Funds can be held in NZD or a range of foreign currencies and invested as on-call deposits offering competitive rates.

What is a Cash Management Account?

Your Cash Management Account is essentially a bank account attached to your investment portfolio. It provides a record of all transactions and simplifies the process of receiving incoming funds such as dividends and settling any purchase or sale of shares and fixed income. At a glance, our service includes:

  • On-call accounts available in NZD and a range of foreign currencies.
  • On-call accounts offer tiered interest rates. This means the interest rate increases for higher balances.
  • On-call accounts enable convenient and timely settlement of your share and fixed income transactions and direct crediting of dividends and interest coupons in the relevant currency.
  • Monthly compounding interest for on-call deposits (where interest is paid).
  • Custodial Services Limited clients may also access term deposits of up to two years in NZD and selected foreign currencies.

CIP Cash Management Nominees Limited, a subsidiary of Craigs Investment Partners, was established in 2010 to hold funds as a bare trustee on your behalf. (see Terms and conditions) CIP Cash Management Nominees holds on-call pooled cash management accounts with ANZ Bank New Zealand Limited or another bank registered in New Zealand.

Cash Management Account transactions can be completed via the phone, email or in writing. Funds in all currencies where CIP Cash Management Nominees has a corresponding account can be credited to your Cash Management Account via direct credit, cheque or telegraphic transfer. Withdrawals can be made in NZD and selected foreign currencies and transferred to your nominated bank account or paid by cheque. Notification of any transaction needs to be received by 1.00pm on any business day.

No. However, if an account has a zero balance or is inactive for a period of time, we reserve the right to close the account at our discretion.

What are the costs?

Cash Management Accounts are not subject to annual account fees, entry fees or exit fees. CIP Cash Management Nominees reserves the right to charge certain fees e.g. cheque dishonours or third party fees on foreign exchange transactions. CIP Cash Management Nominees charges the appropriate bank commission in respect of funds held in on-call Cash Management Accounts. This commission is taken into account when setting the interest rate on CIP Cash Management Accounts, such that the interest rate is correspondingly lower by an amount equal to the actual rate of commission charged. Further details are included in your Advisers Disclosure Statement which is available on request and free of charge.

Under current legislation investors are required to provide their IRD number and their rate of taxation, being 10.5%, 17.5%, 28% (companies only), 30% or 33%, or exempt if an Exemption certificate is supplied by the IRD.

Resident Withholding Tax will be deducted at 33% if you fail to advise us of your applicable rate. Overseas investors should discuss alternatives with their Adviser.

What sort of investment is this?

The Cash Management Nominee subscribes for and is the holder of the respective bank unsecured debt securities constituted by the pooled cash management accounts. Funds held on your behalf in the pooled cash management accounts will be recorded in Cash Management Accounts in your name.

Interest on on-call deposits is calculated daily and paid monthly. Term deposit interest is calculated daily and paid at maturity for periods of up to one year and for term deposits of one year to two years, interest payments may be made quarterly.

The rate of interest paid on each currency is based on the prevailing wholesale rates. On-call rates are tiered for on-call deposits of NZD and AUD so the higher the amount of funds, the higher the interest rate. All other currencies earn a flat rate of interest or nil interest for on-call deposits. Term deposit rates are set each day based on wholesale market levels. See our Cash Management Accounts rate sheet or contact your Adviser for current rates on term deposits.

You can withdraw part or all of the on-call deposits at any time once any deposits have been cleared through the relevant banking system by notifying your Adviser by 1.00pm on any business day. Should you wish to close your Cash Management Accounts you must notify CIP Cash Management Nominees in writing.

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