BANKS WILL RAISE INTEREST RATE.

Star (Christchurch), Issue 18149, 7 May 1927, Page 6

BANKS WILL RAISE INTEREST RATE.

Per Press Association. WELLINGTON, May 7. The banks trading in New Zealand have decided as from May 9 to increase the rate of interest allowed on fixed deposits by* one-half per cent. The following new rates will operate as from Monday for fixed periods:— Between three and six months, 3$ per cent. Six and twelA-e months, 4 per cent. Twelve and twenty-four months, 41 per cent.

Twenty-four months, 5 per cent. The step has been taken for the reason that the adverse course of the trade of the Dominion necessitates the attraction of a larger volume .of deposits. The ratio to be fixed on Monday next will bring New Zealand banks into line with the Australian hanks, where for some years past the fixed deposit rates have been 4£ per cent for twelve months, 5 per cent for twenty-four months.

For the conA*enience of depositors money will be received by banks for odd periods fixed for broken periods between three and six months at rates ruling for three months’ deposits, and similarly between other periods. With an advance in deposit rates there will necessarily be an adA’ance in rates on overdrafts, which were 6* per cent, but will, as from Monday, rule at 7 per cent for the best of accounts.

As from Monday, also rates for transfers of money to London will be increased by 7s 6d per cent with corresponding decreases in the bill buying rate. Rates will be as follow: Buying demand, 12s 6d discotmt; three days at sight, 14s 6d discount; thirty days, 22s Gd discount; sixty days, 32s 6d discount; ninety days, 42s 6d discount; selling rate, telegraphic transfers, 12s Gd premium; demand, 2s 6d premium; thirty days, os discount; sixty days, 12s 6d discount; ninety days, 20s discount.