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This Is Bad News For Fixed Deposit Holder - Investment - Nairaland

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This Is Bad News For Fixed Deposit Holder by Bj5all(m): 2:29pm On Oct 16, 2015
I was at the bank this morning to monitor one of my fixed deposit accounts and also to open another one when a news came to the bank via their mailing portal that CBN as changed the fixed deposit rate for all deposit holder.

The interest rate for deposit between 100k to 50 million is now 2.5% for 30 days and 2% for 60 days and above. For deposit from 50 million and above is 3% as against the 10% ihave been dealing with the bank.

I don't know if this is the same for other banks but i think it is bad news for Fixed Deposit holder.

Please i will want our financial analyst here on nairaland to explain the implications of this decision on the economy.

I left the bank feeling very bad.

13 Likes 10 Shares

Re: This Is Bad News For Fixed Deposit Holder by braine(m): 2:32pm On Oct 16, 2015
This needs some clarificatclarificationss o. Coz I don't understand.
Re: This Is Bad News For Fixed Deposit Holder by Bj5all(m): 2:42pm On Oct 16, 2015
This is serious
Re: This Is Bad News For Fixed Deposit Holder by gayman99: 2:57pm On Oct 16, 2015
If this is true, then the prevailing interest rates on risk assets should drop too. If not, the masses will be at the receiving end.

18 Likes 2 Shares

Re: This Is Bad News For Fixed Deposit Holder by DjAndroid: 2:58pm On Oct 16, 2015
Don't they want to encourage savings anymore?

11 Likes 2 Shares

Re: This Is Bad News For Fixed Deposit Holder by Bj5all(m): 3:07pm On Oct 16, 2015
I think the whole essence is to discourage saving so that there will be more money in circulation.

52 Likes 2 Shares

Re: This Is Bad News For Fixed Deposit Holder by Angelstartups(f): 3:37pm On Oct 16, 2015
Hello,

If the information is confirmed, the implications are:

For those that have already invested in fixed deposit and locked in at far higher rates, your interest will not suddenly change- you will still receive your earning at the end of maturity. So there is no cause for alarm for existing "Fixed Deposit Holders" (to capture it in @Bj5all's language).

However, going forward it means new investors in fixed deposit with the banks will earn those reduced interest as you have quoted.

CBN's key objectives include (among others) to manage THE TRINITY (Exchange rate, Inflation rate and Borrowing rate). The bank adopts different strategies and tactics to achieve it's goals and one of them is through monetary policies, trying to stimulate investment in real sector and capital projects.

Commercial Banks already offer as low as 3.0% on savings account and so the options for the public (surplus side) will then be either they Consume their funds or Invest it (since savings as it is now, erodes capital) in financial assets or non-financial assets, that could give higher returns.

At the moment, these assets include Treasury Bills or investing in Real Sector (which has higher risk) or Equities (which is classified as high risk).

Treasury Bills trade at between 9.5%-11% at the moment and is a safe investment option.

Visit www.angelstartups.com.ng/fixedincome for more information.

Cheers.

15 Likes

Re: This Is Bad News For Fixed Deposit Holder by murphyrichy(m): 4:25pm On Oct 16, 2015
@Op, are you sure of this? I donbiliv it. somebody should please make an enquiry.
Re: This Is Bad News For Fixed Deposit Holder by Bj5all(m): 5:09pm On Oct 16, 2015
murphyrichy:
@Op, are you sure of this? I donbiliv it. somebody should please make an enquiry.
i am very sure of it, i was at the bank today when the news came. you can confirm for yourself by visiting any bank of your choice

1 Like 2 Shares

Re: This Is Bad News For Fixed Deposit Holder by murphyrichy(m): 9:52pm On Oct 16, 2015
Bj5all:

i am very sure of it, i was at the bank today when the news came. you can confirm for yourself by visiting any bank of your choice
okay I will do the needful.

1 Like

Re: This Is Bad News For Fixed Deposit Holder by Moses247(m): 2:26am On Oct 17, 2015
hmmmmn na waooo
Re: This Is Bad News For Fixed Deposit Holder by Caracta(f): 7:34pm On Oct 17, 2015
It's true. I saw the rate guide but I thought it was a mistake.

Treasury bills is next.

3 Likes

Re: This Is Bad News For Fixed Deposit Holder by feelamong(m): 7:57pm On Oct 17, 2015
Caracta:
It's true. I saw the rate guide but I thought it was a mistake.

Treasury bills is next.

Treasury bills has already crashed na..

Bills we used to buy at 14% now going for 10.5%

I think it wont last though

11 Likes 1 Share

Re: This Is Bad News For Fixed Deposit Holder by Caracta(f): 8:15pm On Oct 17, 2015
feelamong:


Treasury bills has already crashed na..

Bills we used to buy at 14% now going for 10.5%

I think it wont last though

With the way CBN is going about everything, I think it will last.

7 Likes 1 Share

Re: This Is Bad News For Fixed Deposit Holder by SleekReek(m): 8:28pm On Oct 17, 2015
I really don't understand why anyone in Nigeria will be doing fixed deposit with our inflation rates, you are only making money for the banks, who know how to use your money better than you, this doesn't not make sense. smiley

89 Likes 9 Shares

Re: This Is Bad News For Fixed Deposit Holder by megainvest: 8:33pm On Oct 17, 2015
Welcome to the stock market where you can earn interests in thousands of percents and risk losing only 99.99% of your funds. Can you handle it? grin

14 Likes 3 Shares

Re: This Is Bad News For Fixed Deposit Holder by nicewoody6: 7:13am On Oct 18, 2015
Hmm
Re: This Is Bad News For Fixed Deposit Holder by ministeriallist: 12:35pm On Oct 18, 2015
DjAndroid:
Don't they want to encourage savings anymore?
Government want to encourage productive investment leading to more jobs. Good move!

51 Likes 5 Shares

Re: This Is Bad News For Fixed Deposit Holder by GudluckIBB(m): 12:47pm On Oct 18, 2015
Bj5all:
I think the whole essence is to discourage saving so that there will be more money in circulation.

FD Is not savings, its investment.

2 Likes

Re: This Is Bad News For Fixed Deposit Holder by SleekReek(m): 1:46pm On Oct 18, 2015
GudluckIBB:


FD Is not savings, its investment.

It is only investment if you fix it in dollars certainly not in Naira, fixed deposit is a loss eventually due to our inflation rate.

5 Likes

Re: This Is Bad News For Fixed Deposit Holder by Adesiji77: 2:17pm On Oct 18, 2015
Caracta:
It's true. I saw the rate guide but I thought it was a mistake.

Treasury bills is next.

You don't mean it? shocked

I almost replied that it was not true and dare the OP to mention the name of the bank until I read your comment.
Re: This Is Bad News For Fixed Deposit Holder by Adesiji77: 9:32pm On Oct 18, 2015
ministeriallist:

Government want to encourage productive investment leading to more jobs. Good move!

I agree if true.

A lot of investors may be forced to liquidate their investments at maturity and "plough" same into their various businesses. Investors will need to be more creative with their funds to get the desired returns.

Risk averse investors may prefer to switch to Treasury Bills (TBs) since the return would still be higher than of Fixed Deposits (FD).

This should reduce the cost of borrowing for FG as more funds will available for investment in TBs thereby reducing interest rates on it.

To compensate for the loss of the FDs, banks should focus more on supporting the real sector.

My opinion though, if the news is actually true.

26 Likes 5 Shares

Re: This Is Bad News For Fixed Deposit Holder by jamace(m): 9:43pm On Oct 18, 2015
Looters will turn their rooms to banks. Expect very damp, smelly mould infested naira notes very soon. grin

28 Likes

Re: This Is Bad News For Fixed Deposit Holder by Seunaj05(m): 9:49pm On Oct 18, 2015
V
Re: This Is Bad News For Fixed Deposit Holder by ayindepremier: 9:49pm On Oct 18, 2015
Bad market for the legal Yahoo Boys,
u go keep 5millions for account go sleep fr house dey expect 2x in a year when u can make 10x! I pitied ur predicament...



una eyes go soon clear like rainbow for sky!




I see no differences btw FDI and LOTTO and baba Ijebu!



#shoutout to the celebrated and legal Yahoo boys on ur predicaments!

4 Likes 4 Shares

Re: This Is Bad News For Fixed Deposit Holder by kossyablaze(m): 9:49pm On Oct 18, 2015
Hmmm

3 Likes 2 Shares

Re: This Is Bad News For Fixed Deposit Holder by Adesiji77: 9:49pm On Oct 18, 2015
jamace:
Looters will turn their rooms to banks. Expect very damp, smelly mould infested naira notes very soon. grin

But they are better off having the funds in the banks, even at the supposedly low rates.

1 Like

Re: This Is Bad News For Fixed Deposit Holder by adonbilivit: 9:49pm On Oct 18, 2015
Re: This Is Bad News For Fixed Deposit Holder by coldsummer: 9:49pm On Oct 18, 2015
Although this is what obtains in America. Maybe they are trying to make Nigeria a credit country like the US. We are in serious trouble if this isn't done properly.


jamace:
Looters will turn their rooms to banks. Expect very damp, smelly mould infested naira notes very soon. grin

My brother they have been doing that since. They hardly take most of the loot to the banks. Problem is, the common man will bear the brunt if this isn't managed properly.


I honestly hope Nigeria knows what she's doing.

3 Likes

Re: This Is Bad News For Fixed Deposit Holder by Warldbest(m): 9:49pm On Oct 18, 2015
all because of buhari, grin

1 Like

Re: This Is Bad News For Fixed Deposit Holder by Nobody: 9:50pm On Oct 18, 2015

1 Like 1 Share

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