RATES OF INTEREST FOR SAVINGS BANKS

Rotorua Morning Post, Volume 2, Issue 248, 10 June 1932, Page 5

RATES OF INTEREST FOR SAVINGS BANKS

("Post" Special Commissioner.)

ORDERS IN COUNCIL ^ — - NEW LEVEL FIXED UNDER FINANCIAL AMDT. ACT IMPORTANT STATEMENT

, WELLINGTON, Thursday. Special provision is made in Parts V. and VI. of the National Expenditure Adjustment Act for maximum rates of interiest that may be paid for deposits by savings bahks, building societys, irivestment societies, and frading companles, to be fixed by Orders in Council. Orders in Council for these purposes operative from July 1 next, are contained in a Gazette issued to-day. The following maximum rates have been fixed for savings banks, ineluding the savings bank departments of building societies (if any): 3| per cent. for fixed deposits or deposits at call made on or after July 1, as follows: — Building and investment societ ies at call or for less than three months, 3 per cent., for three months and up to six months, 3£ per cent; for six months and up to twelve months, 33 per cent; for one year and up to two tyears, 4 per cent., for two years and over 4i per cent. Stock and station agents i per cent. higher in each case. Building Societies 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 an option, in dealing with renewals during the next 12 months, of paying either the rates specified above, or rates £ per cent. lower than the rate payable on such deposits before renewal. Further, de-

posits from shareholders and staff of stock and station agents are exempted from the operation of the Order in Council. It should be noted th -t under the provis'ions of Part VI. of the Act (relating to trading companles deposits) deposits do not include contracts or agreements iexpressed in mortgage or other instruments by way of security, or in company debentures. Moneys received in the course of mercantile current accounts are also exempted. Minlster's Comment In commenting on Orders-in-Coun-cil, the Minister of Finance (the Hon. Downie Stewart) stated that the maximum rates prescribed except in the case of savings banks, applied only to new deposits, and the refiew'al of existing deposits rates fixed for building societies and investment societies (which, under the Act, include all companies other than trading companies, societies, or associations, whether incofporated or not formed for purpose of investing borrowed moneys) are, for eomparable periods, i per cent. above those recently announced by the associated banks. The maximum rates for stock and station agents are. in turn, ^ per cent. above those for building and investment societies. "These rates," added the Minister, "were decided upon as being equitable to all concerned after a careful review of all available information and considerable discussion with the interested parties. Vhile the Govi&rnment is anxious to bring down the interest rates, it does not desire to discourage savings, or to diminish the funds available for the financing of trade and industry." Other Companies Deposits "No limitation of rates has yet been applied to deposits accepted by merchants and trading companies apart from stock and station agents. . The reason for this is the lack of information as to the rates and terms of deposits at present held by the trading companies generally, although it is known that the praetice of accepting deposits is fairly general. Very little information was supplied in respoiise to my public invitation published in the Press of the Dominion. Under these cireumstances, the Government might perhaps have been justified in proceeding without more ado to fix maximum rates for all trading companies but it is not desired to hamper trade any more than can possibly be helped, it was deemed advisable to hold the matter over until information which will be contained in the first lot of returns of deposits required under . the Act have been analysed ancl reviewed..