New banking rules starting in 2015, called Basel III, will require the Australian Prudential Regulatory Authority (APRA) to start discriminating between 'good' and 'bad' deposits – according to the Australian Financial Review (AFR). Popular online savings products offered by the likes of ING Direct, National Australia Bank's (ASX: NAB) Ubank and Commonwealth Bank of Australia's (ASX: CBA) Bankwest, will either disappear or become less attractive, says the AFR.

Investors in term deposits will be legally locked in, and won't have the right to exit them unless the bank agrees, and you will be charged a fee for doing so – materially greater than the loss of interest. The moves are designed so that long-term deposits will rank as 'stable', while online savings accounts will be ranked as 'unstable', as APRA tries to curb liquidity risks.

With a large percentage of the big four banks' funding coming from deposits, they will want to ensure that they have reliable, stable sources of funding – you can see the direction they are being pushed in.

That will create a problem for the banks including Westpac Banking Corporation (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ).  The banks will be  competing for 'secure' deposits in a dwindling pool of depositors wanting flexibility to access their money when they want, and high interest rates. On the other hand, the banks will want long-term deposits on which they don't have to pay high interest.

The Foolish bottom line

With many blue-chip Australian companies paying dividend yields of more than you can get in a high interest account – and more once you consider franking credits – it makes sense for many investors to consider a move into the sharemarket – and that's where the Motley Fool can help.

If you only invest in one company this year, make it our "Top Stock for 2012-13". Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The death of high interest savings accounts appeared first on The Motley Fool Australia.

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Well, that was underwhelming.

After building a cash pile that could buy the New Zealand GDP for a year, and with around US$1,200 arriving every second, on the weekend Apple (Nasdaq: AAPL) finally announced it was going to do something with all that cash.

Rumours and opinions swirled, including our stab yesterday.

Dividend and a buyback

The announcement, when it came overnight, wasn't exactly earth-shattering. Apple has announced a SU$10 billion share buyback, that will be implemented over three years, and a US$2.65 quarterly dividend.

That $10.60 yearly dividend amounts to a yield of around 1.8%.

The market shrugged off the news, with Apple shares up around 2%. Not bad, but neither a huge cheer nor disappointed sell-off.

Positive news

Okay, so on the positive side, it's at least something. Apple could have done exactly the same thing it's done to date and simply kept the cash. The mountain of money would have kept growing, and investors would have continued to worry about the company's plans (and agitate to get their hands on some of that money).

Paying a dividend and instituting the buyback at least is a signal from the company that it's willing to start returning some cash to shareholders. If the cash keeps growing, it's also possible that the dividend will increase over time.

The cash will keep growing

The dividend and buyback are hardly going to change the cash situation at Apple though. In fact, the incoming cash will still dwarf that being paid out – assuming the dividend remains stable – in the next couple of years. That is, despite this decision, Apple's cash hoard will continue to grow.

My favourite line from the overnight commentary came from Liam Denning in the Wall Street Journal who said '[r]ather than raiding the piggy bank, the company is merely dropping quarters into it at a slightly slower pace'.

One thing to note is that Apple – like many other US companies – has significant cash balances outside the United States. Because of the taxation laws in that country, multinational companies have to pay tax on any cash repatriated into the US – one reason Apple has restricted the dividend so it could be paid out of its US-based cash balances.

With those laws unlikely to change any time soon, and Apple unlikely to bring the money home until they do, the cash could be stranded overseas for a while to come yet. That has raised the spectre of a large overseas acquisition, but that would be a significant departure from the Apple playbook.

A marketing message?

Lastly, the buyback is likely calculated to send a message to the market. In the lifecycle of a technology company, paying a dividend is often interpreted as a signal that the company's best days of growth are behind it. That can send a whole lot of growth-seeking investors out of a company's stock, and lead to a period of share price stagnation of worse.

By combining a dividend and a buyback, Apple is likely telling the market that while it is prepared to start handing cash back to investors, it still believes its shares are good value by effectively buying some for itself.

I would have much preferred a special 'one-off' dividend to a buyback – particularly when shares are at an all-time high. Buybacks are best used when a company's shares are significantly undervalued.

Foolish take-away

The simple reality is that if a company can't use its cash and earn a reasonable return for shareholders, it should distribute that money to its owners. From a company that famously refused to do either, a dividend and share buyback are positive – if underwhelming – signs.

If you are looking for ASX investing ideas, look no further than "The Motley Fool's Top Stock for 2012." In this free report, Investment Analyst Dean Morel names his top pick for 2012…and beyond. Click here now to find out the name of this small but growing telecommunications company. But hurry – the report is free for only a limited period of time.

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Scott Phillips is a Motley Fool investment analyst. You can follow him on Twitter @TMFGilla. The Motley Fool's purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691)

The post Apple's great dividend yawn appeared first on The Motley Fool Australia.

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