DEPOSIT RATES FALL

Evening Post, Volume CXV, Issue 38, 15 February 1933, Page 12

DEPOSIT RATES FALL

OVERDRAFT RATES WAIT

A new step in the downward march of fixed deposit rates was made by the Australian banks on February 7, when the rates were reduced to the following:—3 months, 2 per cent, per annum; 6 months, 2% per cent.; 12 months, 2% per cent.; 2 years, 3 per cent. This latest reduction brings down the fixed deposit rate to 2Vi per cent, below the level of 19 months ago. The following table shows the fall of the fixed deposit rates:of the Australian trading banks - since about the middle of 1931:— ■;■'■'■'. 3 mos. 6 mos. 12 mos. 2 yrs P : c. p.c. p.c. p.c. p.a. p.a. p.a. p.a. 1931, June 25 and Prior 4% 49. 5 5Vi (™ c 26 ••"••- 3% 3% 4 4% November 27 .. 3 SW 8?_ 4 1932, March 8 .... 2^_ 3 3}_ 4 May ~ 2i ; . 3 ' 3y_. 3%. November 254 ■ 2% . 3 314 1933, February 7 "... 2 2% 2.% 3 "The general aim (states the "Sydney Morning Herald") has been to force money into industry, and to encourage business and . production by. providing funds at lower rates. The lower deposit rates may be expected to lead to a lowering of overdraft rates as soon as the banks are able to pass on the-benefits of the reduction of their commitments in respect of depositors* money. ... The.fall in, fixed deposit rates is the. latest of a series of important reductions, announced recently. In October the discount rate for Commonwealth Treasury: bills was reduced from 4 per cent, to 3% per cent, and on. January 28 a further reduction to 3% per cent, was annouriced. At the begmmngof December the Commonwealth Bank decided, to reduce-the rate on loans to public bodies from 5 per cent, to an average; of 4% per cent., and on January 21 it was reported that the bank had decided to reduce the rate on advances from 5 per cent, to a maximum- of i% per cent., and on rural credit advances from 4% per cent, to 4% per cent. Both these reductions took effect as from January The rates just announced apply as from February 7 to new deposits and renewals, but not to deposits which have a term to run. •.•■.••■