Marac unveils non-guaranteed deposit rates
Marac Finance has unveiled its non-guaranteed deposits, which offer a strong premium for existing customers to switch over.
Sunday, January 24th 2010, 9:14PM
by Paul McBeth
The company will offer its existing investors a rate of 6% for six-month deposits, and 7% for 12-month terms. That is a premium of 75 basis points in the half-year range, and 125 basis in the 12-month space.
The government’s retail deposit guarantee has generally cost investors 100 basis points in interest as deposit-takers passed on the scheme’s fees.
The government amended its current scheme to allow deposit-takers to offer both covered and uncovered debt securities, something Marac lobbied hard for.
PGG Wrightson Finance, the finance arm of listed rural services company PGG Wrightson, is also offering uncovered deposits.
“Marac understands that for many investors and advisers the crown guarantee will still be important, however we want to provide investors with choice and reward those investors who are willing to invest in Marac based on our strength with a greater return,” said retail investment manager Andrew Ford in a letter to investors.
Ford also said Marac had met the criteria for the government’s extension to the guarantee scheme and will apply later this quarter.
“We wanted to be able to offer non-Guaranteed Deposits prior to going in the extended scheme,” he said.
Paul is a staff writer for Good Returns based in Wellington.
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