PGG Wrightson eyes 90-day deposits
PGG Wrightson Finance made big cuts to deposit rates for the 6-12 month term that saw the spread between the guaranteed and non-guaranteed rates narrow over those terms. But for 90-day deposit rates, the company made big upward moves and now offers the best rate among guaranteed finance companies.
Tuesday, October 19th 2010, 6:59AM
by Sophia Rodrigues
For deposits less than $10,000, PGG cut 12-month deposit rate by 125 basis for excluded deposits but for guaranteed it reduced the rate by a smaller 80 basis points. The new rate is 4.70% for guaranteed and 5.70% for non-guaranteed. The new pricing is interesting considering Marac Finance who has a better rating of BB+ is offering a higher rate of 5.50% and 6.25% respectively.
Fisher & Paykel, who has a similar BB rating, is offering a lower 4% rate for guaranteed deposits but a much higher 6.75% for non-guaranteed.
Equitable Mortgages is offering the highest 6.50% rate for guaranteed deposits and 7.25% rate for non-guaranteed deposits. Among the guaranteed lot, this company is sitting lowest on the rating scale at BB-.
It seems PGG is keen to attract short-term deposits and its 5.40% rate for a non-guaranteed three-month deposit is the highest among all guaranteed finance companies. Marac comes closer at 5.25% and Wairarapa Building Society is also offering 5.25% for over $5,000 deposit.
For an 18-month term, which is the period that extends beyond the December 2011 extended guaranteed scheme, PGG raised both guaranteed and non-guaranteed deposit rates. The new rate for non-guaranteed stands at 8.20% which is the best rate offered by a guaranteed finance company while the guaranteed rate of 6.95% is closely matched by Fisher & Paykel Finance's 7%.
Among banks, Bank of New Zealand was the only one to move last week raising nine-month deposit rate by 10 basis points to 5.30% for a minimum $5,000 deposit. It is one of the three special rates offered by the bank currently. For five months, the rate is 5.15% for minimum $5,000 deposit and for 18 months the rate is 5.40% but for $20,000 minimum.
BNZ also combined two rate brackets to a single one of $5,000-$49,000, thus effectively increasing the rate it was previously offering within the $5,000-$9,999 bracket. The bank's offer of 6.50% rate on minimum $5,000 deposit for a five-year term is one of the best among the big banks, and is beaten only by Kiwibank at 6.75%. The bank's 5.65% on for a three-year $5,000 minimum is also the second best, behind Kiwibank.
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