P.O.S.B. INTEREST

Evening Post, Volume CXXV, Issue 151, 29 June 1938, Page 7

P. 0.5.8. INTEREST

LAST YEAR'S BIG TOTAL

As there are 920,805 accounts in the Post Office Savings Bank, the great majority of New Zealanders will be interested in the task which the officials have now completed of comput-ing-and adding to the credit of every depositor the interest earned for the year ended March 31 last. The grand total amounts to the impressive sum of £1,669,383, and this will be thoroughly well distributed "through <he community, because 91 per cent, of the accounts do not exceed £200. Immediately after March 31 each year the Savings Bank staffs commence the interest computations. Their work is materially assisted by the elimination of pence from deposits, although there are complicating factors of other descriptions. Interest is payable on

every complete pound which stands to the credit of a depositor from the first of one month to the first of the next month. Thus there are twelve calculations to be made to ascertain the year's total of interest.- Where the amount to credit does not exceed £500, the interest rate is 3 per cent. It is 2J per cent, on sums in excess of £500 and not exceeding £2000. Calculations are made easier by the provision of ready-reckoners for the clerks, alth Dugh they are usually so experienced that the interest is quickly calculated without that aid. The calculations are subsequently gone over again by another officer, who makes an independent check on the interest entry. Savings Bank accounts are kept on ledger cards—a very handy device which makes them readily accessible when the depositor desires to make withdrawals. The bank book of the depositor is an exact replica of the ledger card, excepting that the interest credited immediately on the close of the year does not show in the bank book until it has been returned to the Post Office for the annual entry. This process is now going on, and the interest appearing in the pass-book has itself commenced to earn interest because the whole £1,669,383 credited to the > depositors is now capitalised, enabling the principle of compound interest to operate, under which, on the 3 per cent, basis, a deposit doubles itself in 23 to 24 years.