Up and down for P.S.I.S.

Press, 24 June 1978, Page 1

Up and down for P.S.I.S.

The Public Service Investment Society (P. 5.1.5. has raised the interest rate charged for new advances to members to 12 per cent. At the same time the P.S.I.S. has lowered the rate paid to members on their contributional current accounts — those used as cheque accounts, for retail purchases, and other facilities — from 4 to 3 per cent. The society had raised the rate on new advances because it had to pay itself higher interest on incoming money, the general manager (Mr J. A. Lawrence) told “The Press” yesterday.

The society’s members, like everyone else, tended to shop around for the best rates, he said, and to remain competitive the P.S.I.S. had to increase rates on term deposits, which now ranged from 6.7 per cent for 30 days to

10.25 per cent for terms from two to four years. Rates were reviewable at the end of each trading period, and adjustments were made from time to time.

Asked if there was any evidence of members reducing their current accounts, Mr Lawrence said that for some time a strong transfer had been apparent from current accounts to term deposits. The society enjoyed a net money increase of SBM in the latest year: of this, $5.6M (or 70 per cent) was in term deposits.

There was no substance in rumours that the society found itself with unwanted property on its hands, Mr Lawrence said. About 18 months ago 84 "own-your-own” dwelling units had been completed, and all were sold to members.

Since February 14 units had been completed in Auckland, and these were selling well, within the original price structure. In Wellington, 38 units had just become available; in the two years it took to build these, the market had fallen away, Mr Lawrence said. But the P.S.I.S. had hedged its bets: although originally designed as own-your-own units, they were also suitable as service apartments, and they were now being developed as such.

The demand for service departments, used by members whose residence in Wellington was of a transitory nature, was considerable, Mr Lawrence said.