Thread: Banks & Credit Cards

Originally Posted by Meccles

What’s the going rate? 🤪

I would like to ask our Treasurer and Minister for Finance what their government plans to do to get interest rates back up where they should be. Their government has now served two terms and done nothing to get rates up. The Reserve has just reduced the official rate again. For too long now borrowers have been stealing the use of investors money paying negligible interest. My generous bank has just offered me 2.5% on a term deposit. FFS, the real rate of inflation is 5 to 7%. The long term bank deposit rate should be at least 10%. Brokes, bums, and borrowers should be the lawful prey of the investor not the other way around. I don't care if they have to pay high rates on their borrowings. No-one is holding them at gunpoint forcing them to borrow. It is their choice. I want a fair return for the use of my money.

Originally Posted by Bigbjorn

I would like to ask our Treasurer and Minister for Finance what their government plans to do to get interest rates back up where they should be. Their government has now served two terms and done nothing to get rates up. The Reserve has just reduced the official rate again. For too long now borrowers have been stealing the use of investors money paying negligible interest. My generous bank has just offered me 2.5% on a term deposit. FFS, the real rate of inflation is 5 to 7%. The long term bank deposit rate should be at least 10%. Brokes, bums, and borrowers should be the lawful prey of the investor not the other way around. I don't care if they have to pay high rates on their borrowings. No-one is holding them at gunpoint forcing them to borrow. It is their choice. I want a fair return for the use of my money.

your playing risk minimal investment, increase your risk and increase your return or put itunder your bed
cheers
blaze

Originally Posted by Bigbjorn

I would like to ask our Treasurer and Minister for Finance what their government plans to do to get interest rates back up where they should be. Their government has now served two terms and done nothing to get rates up. The Reserve has just reduced the official rate again. For too long now borrowers have been stealing the use of investors money paying negligible interest. My generous bank has just offered me 2.5% on a term deposit. FFS, the real rate of inflation is 5 to 7%. The long term bank deposit rate should be at least 10%. Brokes, bums, and borrowers should be the lawful prey of the investor not the other way around. I don't care if they have to pay high rates on their borrowings. No-one is holding them at gunpoint forcing them to borrow. It is their choice. I want a fair return for the use of my money.

The real rate of inflation is actually under 2% - but of course, that is the economy as a whole, not the inflation seen by any particular individual.

And as to the question of what interest rates "should" be - interest rates have in historical terms been excessive for close to fifty years until recently (since 2008). Over most of recorded history, interest rates on low risk investments have been around 5%, and low risk borrowers (such as for real estate) have had to pay well under 10%. Add in risk - and what the interest rate is should depend on the risk.

Originally Posted by JDNSW

The real rate of inflation is actually under 2% - but of course, that is the economy as a whole, not the inflation seen by any particular individual.

And as to the question of what interest rates "should" be - interest rates have in historical terms been excessive for close to fifty years until recently (since 2008). Over most of recorded history, interest rates on low risk investments have been around 5%, and low risk borrowers (such as for real estate) have had to pay well under 10%. Add in risk - and what the interest rate is should depend on the risk.

John, no-one will convince me that inflation is only the propagandised 2% rate espoused by politicians and bureaucrats. I know how my cost of living has risen year in, year out, and it is more than 2%. Decent interest rates have been achievable throughout most of my life. I am 78. In mid 1970's I had a term deposit at 13.5%, later in the 70's I had a Certificate of Deposit with CBC Bank at 17%, and in 90-91 had a term deposit at 18%. In 2012 I had a loan on first mortgage returning 12%. In 1962 my father took out a number of term deposits for varying periods when preparing to retire to Brisbane. He died in 1970 and I was his executor. Last night I dug around in our archives and found record of one that was still current when he died. It was taken out in 1962 for 10 years and was at 10%.

Rates available have fallen dramatically over the last 10-12 years and good rates are now unobtainable. The best I can do at present is blue chip shares with fully franked dividends which are returning up to 8% when the franking credits are taken into account.

This is why I would like the Treasurer an Minister for Finance to explain what their government is doing to get interest rates up where they should be. I am too old to be looking at long term investments like property which I feel need to be held for 10-15 years to achieve profit by capital gain.

Being within a year of the same age as you, I have lived through pretty much the same range of interest rates - but the period since probably about 1960 up until 2008 saw historically abnormally high interest rates, and I think you are kidding yourself if you think these are normal. During some of this time interest rates got to ridiculous levels - I can't remember just when it was, some time in the 1970s, I think, that Australia's then largest company (BHP) reported record profits for an Australian company. What was not generally published was that for several years close on half of that profit was from lending thier spare cash overnight on the short term money market - interest rates were that high!

Inflation is currently around 2%, and has been close to that for the last few years, but before that it was higher. And as I commented above, that is the overall inflation rate - not what applies to you. I don't know about you, but I find my largest expenditures tend to be taxes (rates, motor vehicle etc) and insurance. And these have certainly grown at way above the inflation rate. Also, a lot of changes in society have resulted in more or less obligatory costs that simply did not exist before - e.g. mobile phone charges, internet charges, cost of complying with ever-increasing red tape etc.

And even 2% compounded means over just a few years, price rises become very noticeable.

This was on the 7.30 report last night.

7.30 : ABC iview

Discussions re the effect very low interest rates are having on self-funded retirees. Now becoming pensioners and a cost to the government.

You only have to look at Japan to see the effects which low interest rates have had over the last two decades. Stagnation.

Originally Posted by Bigbjorn

This was on the 7.30 report last night.

7.30 : ABC iview

Discussions re the effect very low interest rates are having on self-funded retirees. Now becoming pensioners and a cost to the government.

As soon as basic services were sold off by state and federal governments the ordinary bloke in the street was being farmed.

DL