Higher rates from P.O.S.B.

Press, 30 August 1977, Page 2

Higher rates from P.O.S.B.

PA Wellington Higher interest rates will apply to new investments in Post Office Savings Bank investment accounts and New Zealand savings certificates, and there will be an increase in bonus bond prizes, the ; Postmaster-General (Mr WilIkinson) announced yesterday.

The new investment account rates will be:— six months at 7 per cent; one year, 8 per cent; two years, 9 per cent; and three years, 10 per cent.

The new rates will apply to deposits made on or after August 25, but not to current investments.

The interest rate on deposits withdrawn before maturity has also been increased and will generally be the rate appropriate to the period held, up to the time of withdrawal. Investment account interest up to $2OO annually will continue to be exempt from income tax.

There will be a new fiveyear issue of savings certificates which will produce a higher return than the current issue. For the new issue the increase in value at maturity will be equivalent to an interest rate of 10 per cent per annum.

Interest earned on savings certificates will qualify for a $5OO tax exemption in the year they are cashed in, or at maturity. Mr Wilkinson said an in-

i! vestment of $B2O, for example, would after five I years return $1320 and none i of the interest would attract ■ income tax. Rates for savings | , certificates cashed before ■ maturity are: — up to two : years, at 3 per cent; two • years and less than 3 years, • 4.881 per cent; three years and less than 4 years, 6.266 : per cent; and four years and : less than 5 years, 7.791 per > cent. , The new interest rate will , apply only to savings certificates bought on or r after August 25, and not to • current holdings. The interest rate on investment in bonus bonds, i which determines the size of > the monthly prize fund, will . be increased from 4,25 per r cent to 6 per cent. > The new interest rate for • bonus bonds will produce an increased monthly prize fund . which for September will be I about $687,000. i This will be distributed to holders of prize-winning . numbers of bonus bonds ; bought on or before August . 31 and not redeemed as at i September 30. The results of the first . draw under the new prize r scale will be announced on i October 11. t There will be a first prize of $50,000 and two second ; prizes of $25,000. i Other prizes will remain > the same, except that there r will be new $lOOO prizes and a higher proportion of prizes ■ in the $25 to $5OO range.