WHERE MONEY IS CHEAP.

Auckland Star, Volume LX, Issue 141, 17 June 1929, Page 4

WHERE MONEY IS CHEAP.

BRITISH SAVINGS BANKS.

PAY 2% PER CENT ON DEPOSITS

A proposal was recently made in the House of Lords to increase the interest payable to depositors in the British Post Ollice Savings Bank from 'IVz to 3 per cent, subject to the approval of the Treasury. Discussions led to an astonishing revelation of the profits made by the State out of this institution. The last year for which complete figures are available is 1927. in that year the Post OfHce Savings Bank made a profit, after paying all expenses, of £3,734,000. Of that sum £740,800 was placed to reserve, and the remainder, £2.987,000, μ-us paid to the Treasury in relief of taxation. Lord Arnold moved to increase the rate of interest. He pointed out that the profit made was due to the difference between the low rate of interest paid to Post Office depositors, and the rate at which' the Post Office could invest their money. The Post Office rate of 2 x k per cent was fixed in ISGI, and bore no relation to present financial conditions. Depositors in the Post Ollice Savings Bank were in the majority of cases people who had no knowledge of how to get a better return for their money, and advantage was being taken of their ignorance. This point was very strongly developed by the Marquess of "Heading. "I assume there is not a .single- member of this House," he said, "who has put his savings in the Post Ofiicc Savings Bank at 2V 3 per cent. You have more financial acumen." To pay interest at 2Vz per cent to poor people who had no knowledge of how to invest, while other banks were paying 5 per cent, was imposing an injustice and was meanness. Lord Templeniore, for the Government, read a statement supplied to him by the Post Oflice, which contained a firm refusal to concede any higher rate of interest on the ground that there was no proof that the number of depositors would be increased thereby. Lord Arnold's proposal was defeated by 44 to 10.

The 'New Zealand Post Office Savings Bank rate is 4 per cent up £SQQ.