The Meeting Place

Rate cut not good news for retirees

Yesterday’s decision by the Reserve Bank of Australia (RBA) to lower the cash rate to 1.75 per cent may have brought joy to many mortgage holders, but the underlying note should be of concern.

Problem one – our economy is contracting sufficiently that the RBA deems it necessary to lower the cash rate to fight deflation and stave off an economic downturn.

Problem two – ask any saver what interest rate they’re getting on their deposit and they’ll laugh in your face. So low are returns on money held in savings and term deposits that the rate of deeming applied by Centrelink is often greater. Meaning not only do savers lose out on interest but they’re also penalised by losing a high proportion of their Age Pension. A lower interest rate will do nothing to ease this problem.

Are your savings affected by the low interest rates offered by the banks? Has your Age Pension taken a hit due to higher deeming rates?

FirstPrev12(page 2/2)
17 comments

As Mussifacts states unquestionably.  "Blame the Libs for our low interest rate".What would you do with the interest rates if you were the Socialist Emperer?  Sack the Reserve Bank, or just bring them under your control?  Isn't it odd that we are so badly governed that our interest rate is at the all time low of 1.75% when we have leading World economies like Switzerland & Sweden with negative interest rates & England 0.5%.  Perhaps you would prefer the Communist/Socialist rate of 11%.  Just have a quick look at the chances of a young couple borrowing to buy a home in Russia, with Mortgage rates of around 15%.

A friend of mine bought a house in Oct 1983. First home Loan interest rate was 22%

Term Deposit Interest was 18%.

Good for those who had savings but a killer for those with home loans.

 

 

innes

WHAT a totally WARPED comment.....

Yes, it IS a bad thing for interest rates to be so low, duh!  Do you really think it is a good thing to have a NEGATIVE interest rate.... for goodness sake, get a GRIP innes.

Here is an excerpt for you to read:

Negative interest rates put the global economy on a razor’s edge

Negative Thinking: Central bankers’ last-ditch attempt to heal their weak patient

Negative interest rates, which central banks in several countries have implemented as a way to spur economic growth, is a radical move. In this three-part series, ‘Negative Thinking,’ commentator Satyajit Das examines this policy and the risk it carries. 

Several of the world’s central banks have crossed the Rubicon, commencing a high-risk experiment with negative interest rates. The intent is clear: reduce debt by confiscation and transfer wealth from savers to borrowers. This is ultimately an admission of defeat, as traditional means of bringing excessive debt under control have failed.

Market Watch.... New York

 

What is all this rubbish about socialist emperors and communist/socialist rate of 11% and then point to world economies like Switzerland & Sweden with negative interest rates, as a prime example of something good??

Maybe I should send you to room 101 for some basic economics lessons!  

 

Lets look at the other end of the spectrum seeing as how you like to bring inanities into your comments ... let's look at a FASCIST country, shall we, for a change, whereby there are BIG problems, Yes!

UKRAINE fits that bill.... a democratically elected government violently overthown by NUTTER SUPREMACISTS who were weaponised, armed and supported by the USA and which is now yet another BASKET CASE caused exclusively by the USA and its bloody and murderous foreign policies. 

Here you go innes.... some rates I extracted from the internet:

Ukraine Interest Rates - APRIL 2016

Depositup to: 22.50%

Savings Accountsup to: 12.00%

All Loansfrom: 22.30%

Home Loansfrom: 22.30%

Car Loansfrom: 23.50%

Credit Cardsfrom: 38.00%

LINK

This too is NOT good for the economy!!!

 

HENCE, innes the previous government did a good job during the HEIGHT of the GFC to maintain our interest rates at a reasonably healthy level and to keep our economy level and our debt low.  We are in trouble now because our economy is in a bloody mess and our debt has blown out which is WHY our interest rates are taking a dive... our economy is NOT healthy....... Duh!

IT SEEMS that we Australians are the only ones that don't know we are in trouble.... this is a headline in the section where I got the Ukraine interest rates from:

"AUSSIE DOLLAR CRASH 2016 - Aussie Dollar to fall below $0.50c... Protect your wealth"

 Don't know about this prediction BUT that was on a Ukraine site!!!!!

I am so frustrated with the Centrelink AND the Bank -- as at the bank we are NOT getting the deeming rate -- we are getting far below it and the young people on the phone when I ring know not a thing about deeming -- have no idea at all and said they had not EVER heard of it !? 

The Centrelink that I rang,   at 8am -- didn't know much either and have booked me to speak with a Finacial advisor FGS !  Why the hell I need to speak to one of those I have NBI   It used to be that the banks HAD to give you the Deeming rate into the account that your pension was paid into,  is anyone else having this problem?  Not getting the right deeming rate?

Some banks don't even use the deeming rate at all.

You are not telling us anything Ken Innes. 

When we see how little interest we get (keep some to netbank so we always have cash when we want it) I think we would rather not look at the pittance in interest, that brings :(

Not really complaining as we are o.k. :) 

I remember when I had a shop in Richmond and borrowing to buy antiques I was paying 17% but people still wanted 'bargains' :( 

How are you going young man?

FirstPrev12(page 2/2)
17 comments