Cash flooding into guaranteed finance companies as bank deposit rates fall below 6%
27th Nov 08, 8:00am
The few finance companies who have left their interest rates close to 10% after receiving the government guarantee are receiving a wall of cash from savers disappointed that bank term deposit rates are falling below 6%. Interest.co.nz is hearing reports from finance companies of savers approaching them, even before they are guaranteed, saying they are looking to bolster their yields now bank term deposit rates are falling below the psychologically important 6% market in anticipation of a big cut in the Official Cash Rate next Thursday. Staff are flat out taking deposits. The main banks and Kiwibank are still offering around the 6% to 6.75% mark for 2 to 6 months, but most have cut their one year and longer rates below 6%, with the exception of ASB on 6.25%. Meanwhile, the government guaranteed Allied Nationwide has kept its 18 month debenture rate at 10.75% and Fisher and Paykel Finance is at 9.15%. Others with 9% plus rates for up to 2 years that have applied or are already approved for the scheme include Mutual Credit Finance, Broadlands Finance, Asset Finance, Equitable, General Finance and FMG. * This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.