RBA Money

What are the highest interest rates for savings and fixed deposit and in which bank? Which country? Can foreigner open accounts in these banks?

US Banks have been paying the most interest. Foreigners have been buying US debt and investing in US banks forever.

Currently Zions Bank (866-7618349) offers a savings account paying 3.50 % when $20,000 is deposited. Smaller amounts give less interest.

CD’s are generally available paying 5.32 % with a deposit of only $1000.00 and held for 1 year.

Both of these quotes are FDIC insured.

Check on Savings and CD Rates by typing in BEST CD RATE or BEST SAVINGS RATE into your Yahoo Search.

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How does raising interest rates every so often keep the economy going? I don’t get it. By raising rates and increasing peoples mortage repayments helps keep the economy moving? I see it the other way around. Raise my mortgage rates by 200.00 every month actually stops people from having extra money to purchase good & servises thus slowing down the economy. Am I missing something here?

The purpose of raising rates is to control inflation and to control the overall money supply in the nation. There is a fine line to walk between too much money in the economy and too little money in the economy. Too much money (rates too low) and there is inflation and people on fixed incomes cannot buy what they need. Too little money (rates too high) and people can’t buy houses and businesses can’t expand and grow. If there is too much money (rates too low) people get greedy, raise prices, overbuild most everywhere, and generally go nutty. Soon houses would cost millions, cars would start at $100,000, and a gallon of milk would be $100. The economy must stay within this fine line between too much and too little.

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April 7 (Bloomberg) — James Reynolds, chief executive officer of Loop Capital Markets LLC, talks with Bloomberg’s Betty Liu about the financial crisis and prospects for interest rates. (This is an excerpt of the full interview. (Source: Bloomberg)

Duration : 0:1:52

Read more…

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I want to know how banks set the interest rates for mortgages. All I know is that they move up and down with the fed funds rate and discount rate (Correct me if I am wrong). Does anyone know all factors that play into the rates that lenders come with? Is there a way to calculate or give more or less weight to any one of them? Thank you.

That is not to say that when the fed lowers rates the mortgage rates don’t tend to fall slightly but not in unison.

The question i think you want to know is why the rate quotes differ so much does. The fact is all mortgage professionals are finding rates from the same pond so to speak.
lenders and brokers have rate sheets it shows the rates that would be available to you what most people don’t know….simply put it shows the rate with the borrower paying no points to get a lower rate and then the other which is it shows the lender or broker your rate that would pay him a yield spread! 1/2% of loan amount to as much as 3% of your loan amount

And in some cases the borrower has no idea of this! Or it is explained away when you see a high APR by saying the reason is because of the closing costs. Closing costs do move the apr higher but considering the apr is factored over the life of the loan 30 years or whatever your term is.

The term is yield spread or back end money. most brokers and lenders even banks split the amount they want to make between the lender fee and yield spread so if a lender wants to make 3% then they show half in the front of 1 1/2 % lender fee.
Borrowers should always focus on the rate. It is unfortunate that so many brokers use the raising of rates to make more money and that doing this can cost the borrowers tens if not hundreds of thousands of dollars in added interest.

The simple fact is you need to use a loan comparison calculator to show the differences in loan offers. 1/2 % higher rate on a 30 yr fixed with a 250k home loan is 48,750 in additional interest!
Remember that the majority of the first 10 years of mortgage payments go toward the interest you owe!

HERE IS A CALCULATOR TO SEETHE BIG PICTURE

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This video animation, produced on behalf of the Directorate General for Economic and Financial Affairs (DG ECFIN) at the European Commission, claims that the euro keeps interest rates stable in all countries of the euro zone, forgetting the effect that Credit Default Swaps have on actual rates on government debt in crisis-hit countries like Greece.

The interest in Greek eurozone debt currently is more than 300 basis points (3 full percentage points!) higher than the standard eurozone interest rates.

Duration : 0:1:8

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Technorati Tags: animation, CDS, clip, credit, default, DG, ECFIN, euro, European Commission, eurozone, Greece, news, Swaps

When the RBI has a repo rate of 6% and a reverse repo rate of 7.5%, one would expect the overnight call rate among the banks to be somewhere between 6% and 7.5%. I believe the current very low levels of the call rate is because of the RBI using the repo window to suck liquidity only to a limited extent of Rs 3000 crore / day. What i dont understand is how the call rates can be as low as 1% (the 1% is for interest charged per annum right?). Isnt this cheap money for the banks then? Why not borrow cheap and park them in treasury bonds or liquid mutual funds? How can the overnight call rate be far off from the market interest rate irrespective of the repo and reverse repo rates and the amount of money the RBI actually does borrow from the commercial banks?

Hi!!! I dont know the reason for low calling rates during night times. But I got a site which offers very low calling rate. Find the below link.

One Year Unlimited Free Calling to 25 Destinations! – http://cbnk.biz/HLG7U310471WWGNYEE-selva

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Is it when 10 or 30 year bonds go up, interest rates typically go down or do rates go up and down with long term bonds?

Bond prices typically go down when interest rates go up. Because when rates go up new bonds are issued at those higher rates and it makes existing bonds less valuable. And vice versa. The longer the maturity of the bond generally the more a change in interest rates affects the price.

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March 31 (Bloomberg) — Dan Fuss, vice chairman of Loomis Sayles & Co., talks with Bloomberg’s Susan Li from Tokyo about the outlook for the global bond market and his investment strategy. (Source: Bloomberg)

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Hey, Im looking at buying my first house now.. Whats the interest rates for a home loan these days after that 1% interest rate cut from the rba the other day which the banks said they would pass on.. if they do.

Hi Anubis,

With the reserve bank lowering rates on Tuesday a number of the lenders have already passed the rate cut on. You should be looking at a variable rate of around 4.69% and upwards, with that in mind in the coming days the banks will be playing around with their rates to ensure they are competitive. So depending on what type of features you require in your loan you should be able to get a loan with a mid to high 4% to a low 5%.

I would advise going to speak with a professional mortgage broker so they can show you all your options and explain them further.
I would be more than happy to help you with that.

James Grady
Mortgage Planner/broker

http://www.theNEXThomeloan.com

1300 660 107

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What is expected to happen to short-term interest rates and long-term interest rates during the next year?
Why would it change, stay the same or rise?

I don’t see any way the fed is going to raise rates for a while. I don’t see a big cut coming either. My guess is that the fed cuts 50 basis points late this year. That drives down short term. My guess is long term rates stay flat.

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