CUTS IN INTEREST

New Zealand Herald, Volume LXX, Issue 21456, 1 April 1933, Page 12

CUTS IN INTEREST

OPERATION FROM TO-DAIY LOCAL BODY SECURITIES MONEY IN SAVINGS BANKS Important measures bearing on the Government's policy of reducing rates of interest will operate to-day. Interest paid on local body securities held in New Zealand will in future be subject to a reduction of 20 per cent, which displaces tho 10 per cent stamp duty. There is a statutory limit of per cent. Interest on deposits with tho Post Office Savings Bank and trustee savings banks will be limited to 3 per cent as from to-day. The rates of interest paid by building societies and investment companies and by local bodies for deposits are also reduced. Tho maximum rates for new moneys accepted by building societies and investment companies will be us follows:—At call, 2£ per cent; throe months, 3 per cent; six months, per cent; 12 months, ok per cent; two years and over, 4 per cent. Renewals of existing deposits may bo effected at rates within tho maxima fixed by existing Orders-in-Council for new deposits.

Local bodies will be restricted to rates of interest not exceeding those prescribed for new moneys accepted by building societies and investment companies. As local authorities canno't accept deposits for any period over a. year the maximum rate will bo 3£ per cent. The Public Trusteo will, from to-day, reduce the rate of interest on investments in tho common fund from 4 per cent to 3Jt per cent. The maximum rate that may be paid on moneys in future accepted by the Public Trustee under investment agencies has been limited to 3j- per cent. In respect of investments already held under such agencies a further 5 per cent reduction in tho amount of interest payable is being made, with a minimum of 4 per cent. Tho reduction in tho bank overdraft rate to 5 per cent for best accounts will take effect from May 1.