What are the benefits of a Bank Guarantee?
1. You can meet your contractual obligations to a supplier or vendor, whilst having the comfort of your cash being held on deposit in your name with the bank.
2. Deposit funds held as security for a Bank Guarantee attract prevailing credit interest rates on the full amount of the deposit, with interest earned paid to your nominated transaction account. If you prefer to offer real estate as security, speak to a banking representative for more information about this option.
3. A Bank Guarantee can have an expiry date after which the guarantee automatically ceases. Alternatively, it can be open-ended, providing maximum flexibility where completion dates are not certain. The vendor or supplier will advise you whether they require the Bank Guarantee to have an expiry date or to be open-ended.
4. For the supplier or vendor, a Bank Guarantee assures them of payment if they make a written demand to the bank on the Bank Guarantee.* There is no need for them to hold or manage individual bonds from their customers.
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