Dealing with cash shortfalls
A bank guarantee is a promise in writing to a third party, often a supplier or landlord, guaranteeing that a payment will be made on your behalf, by Heritage, when requested on demand. Only the beneficiary can demand the payment – the face value of the guarantee.
Establishing a bank guarantee requires security in the form of cash in deposit with Heritage, or property of a type and value deemed acceptable to the bank.
If you establish a cash secured bank guarantee, your money will be held in a term deposit as security and earn interest as per published rates. Property secured guarantees do not earn any interest.
In most cases bank guarantees are used:
There is no minimum or maximum amount, however:
Fees differ based on the type of security provided for the guarantee. Annual fees are payable in advance annually and are automatically debited from your nominated Heritage Bank account.
|Annual Fee||2% of the guarantee amount or $200, whichever is greater. First payment due before the guarantee is issued.|
|Establishment Fees||To be calculated and advised on application and confirmed in letter of offer. Fees may include: Application fee, Land Titles Office registration fees, Title Search fees and Valuation fees.|
|Annual Fee||2.5% of the guarantee amount or $200, whichever is greater. First payment due before the guarantee is issued.|