INTEREST ON DEPOSITS

Taranaki Daily News, 10 June 1932, Page 9

INTEREST ON DEPOSITS

LATEST ORDER-IN-COUNCIL

MAXIMUM RATES GAZETTED.

EXPLANATION BY THE MINISTER.

By Telegraph.—Press Association.

Wellington, June 9. Orders-in-Oouncil under the National Expenditure Adjustment Act have, been gazetted providing for the maximum rates of interest that may be paid for deposits by savings banks, building societies, investment societies and trading companies, to be operative from July 1. Savings Banks, including savings bank departments of building societies, may pay a maximrun of 3.i per. cent. The rates on fixed deposits are as follow: Building and investment securities at call less than three months, 3 per cent.; three to six months, 3J per cent.; six to 12 months, 4J per cent. Stock and station agents, similarly, 3J, 4£ and 4J per cent. In the case of building and investment societies these maximum rates are applicable to renewals of existing deposits. Stock and station agents, however, are given the option in dealing with renewals during the next 12 months of paying either the rates specified or rates % per cent, lower than the rate payable before the renewal.

Deposits from shareholders and the staff of stock and station agents are exempted from the operation of the order. / • In the case of trading companies the deposits do not include contracts or agreements expressed in a mortgage or other instrument by way of security or in company debentures. Moneys received, in the course of a mercantile current account are also exempted. Commenting on the Orders-in-Council the Minister of Finance (the Hon. W. D. Stewart) stated the maximum rates prescribed, except in the case of savings banks,-applied only to new. deposits and the renewal of existing deposits. The rates fixed for building societies and investment societies were, for comparable periods, half per cent, above those re-,.-cently announced by . the Associated Banks. The maximiipi rates for stock and station agents were in turn half per cent, above those for building and. investment societies. These rates, added the Minister, were decided upon as being equitable to ail: concerned after a careful review of albavailably. information and considerable- discussion 'With interested parties. “While/'the Government is anxious to bring down interest rates,” Mr. Stewart said,, "it does not desire to discourage savings or diminish the funds available for financing trade and industry. ■ . ;.‘‘No limitation.of rates-has yet been: applied to deposits accepted by. mer-. chants and trading companies apart, from stock and station agents. .The reason for this is lack of information as to the rates and terms of deposits at present held by trading companies generally. Although it is known the practice of accepting deposits is fairly general, very little information was supplied in response to the public invitation. ... x ‘ “Under these circumstances the Government might perhaps have been justified in proceeding without more ado to fix the maximum rates for all trading companies, but as it is not desired to hamper trade any more than can possibly be helped it is deemed advisable to hold the matter over until the information that will be contained m the first lot of returns of deposits required under the Act has been analysed and reviewed.”