RATES OF INTEREST

Otago Witness, Issue 4038, 4 August 1931, Page 50

RATES OF INTEREST

NEW SCALE ANNOUNCED A GENERAL REDUCTION. WELLINGTON, July 28. The Associated Banks announce that the rates of interest allowed on fixed deposits lodged on and after August 1 will be as follows: — On deposits for three months and under six months, 34 per cent, per annum. Six months and under 12 months, 3| per cent." Twelve months and under 24 months, 4 per cent. Twenty-four months, 44 .per cent. From November 1 suitable adjustments of the rates on advances will be made and on that date a minimum rate of 64 per cent, will come into operation. “ The usual practice of the banks,” says the statement, “ is to alter the' rates of interest' in accordance with the movements in the aggregate deposits and advances as affected by the law of supply and demand. On this occasion a departure from the practice has been made for the purpose of co-operating with the Prime Minister’s negotiations for a general voluntary arrangement designed to bring about a cheapening of the price of money. “ The reduction of rates of interest now announced will, of course, not affect current fixed deposits. The banks will continue to pay the higher rates borne by those deposits for a period up to 24 months. For this reason it is necessary in the unusual circumstances, that there should be some delay in reducing the rates of interest on advances.”

The present rates, which are on a somewhat different basis, are as follows:—Three to 12 months, 3f per cent.; 12 to 24 months, 4} per cent.; 24 months, 5 per cent. The existing rate on advances ranges from 7 per cent, to 8 per cent.