Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post
Market Place

Add an ad

View all ads

Latest topics

» 8 Finance companaies to be closed very soon
by wisdom79 Today at 7:33 am

» Why AAIC Should trade above RS.50/-
by wisdom79 Today at 7:25 am

» Copreus (Pvt) Ltd - Need some Information
by jake94 Yesterday at 5:15 pm

» Sri Lanka’s largest pension fund EPF return to Colombo Stocks
by samaritan Yesterday at 4:04 pm

» Head and Shoulders Top
by freeforexsignals2020 Yesterday at 8:49 am

» UNION BANK (UBC) to be takeover by Union bank of india
by aklt Yesterday at 1:20 am

» INVEST ON AAIC, HASU, UAL.... YOU WILL NEVER WORRY......
by wisdom79 Fri May 24, 2019 7:42 pm

» Pakistan’s trade with Sri Lanka comes to a halt
by soileconomy Fri May 24, 2019 7:35 pm

» Daily Stock Market Update
by Teller Fri May 24, 2019 7:18 pm

» Market will test 4700
by karuna2 Fri May 24, 2019 12:25 pm

» Keep eye on Politics
by samaritan Fri May 24, 2019 11:49 am

» CSE from Dawn of Peace to Rebirth of Terrorism
by Yahapalanaya Fri May 24, 2019 9:59 am

» EAST Steady at 18
by mark Fri May 24, 2019 9:25 am

» New Support Level 5300
by hammurabi Thu May 23, 2019 8:47 pm

» LIOC upward curve
by karuna2 Thu May 23, 2019 5:57 pm

» SEC yet to publish its 2017 Annual Report
by Teller Thu May 23, 2019 5:10 pm

» HNB Assurance March net down 83-pct
by Teller Thu May 23, 2019 1:18 pm

» PABC net down 13-pct in March; loans contract
by Teller Thu May 23, 2019 1:15 pm

» Indian stocks jumped to record highs
by Teller Thu May 23, 2019 1:13 pm

» modi wins-India to no1 in the world
by Teller Thu May 23, 2019 1:07 pm

» Hayleys revenue up 34% YoY to Rs 219 bn in FY 18/19
by Teller Thu May 23, 2019 1:02 pm

» undervalued stock
by Teller Thu May 23, 2019 1:00 pm

» CIND , 10% guaranteed return
by Teller Thu May 23, 2019 12:57 pm

» INVITATION TO FORUM MODERATORS
by Agape Thu May 23, 2019 8:52 am

» Reputation???
by Uaecoindubai Wed May 22, 2019 7:12 pm

» AIA INSURANCE DE-LISTING (CTCE)
by lokka1 Wed May 22, 2019 12:55 pm

» Sri Lanka’s Top 10 Imports
by Gajaya Wed May 22, 2019 11:16 am

» Top 10 Small Scale Business ideas & Opportunities in Sri Lanka 2019
by Gajaya Wed May 22, 2019 11:15 am

» when bank lending rates put down ?
by nuwanmja Wed May 22, 2019 11:01 am

» Sri Lanka's EPF enters stock market with blood in the streets
by God Father Tue May 21, 2019 8:21 pm

» Sri Lanka caught in the big power conflicts
by God Father Tue May 21, 2019 8:16 pm

» High Profile Selling at EAST
by Uaecoindubai Tue May 21, 2019 4:43 pm

» A Trader’s Guide to FIX Engine
by Brenda John Tue May 21, 2019 11:24 am

» Reasons for market to crash
by Uaecoindubai Tue May 21, 2019 10:08 am

» ගෙවුම් ශේෂය, වාහන බලපත් හා ඩොලරයේ මිල
by ChooBoy Mon May 20, 2019 5:59 pm

» Terrorism and its Impact on the Sri Lankan Economy
by ChooBoy Mon May 20, 2019 5:41 pm

» Sri Lanka Equity Market Place
by Sstar Mon May 20, 2019 4:36 pm

» Sri Lanka Equity Market Talk
by Sstar Mon May 20, 2019 12:23 pm

» Sri Lanka Equity Market Help
by Sstar Mon May 20, 2019 12:18 pm

» LOFC IN FOR A BIG RUN
by stockback Sun May 19, 2019 5:20 pm

» Look PAP Amazing company
by Uaecoindubai Sun May 19, 2019 5:13 pm

» Sri Lanka Equity Market Place
by Uaecoindubai Sun May 19, 2019 5:13 pm

» CSE NOW AND AFTER ELECTION
by Ahcha Sun May 19, 2019 4:40 pm

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market & Forum Help » Stock Market News » Why Rate For 3 Months FDs the Highest?

Why Rate For 3 Months FDs the Highest?

Go down  Message [Page 1 of 1]

1Why Rate For 3 Months FDs the Highest? Empty Why Rate For 3 Months FDs the Highest? on Fri Dec 02, 2011 2:55 pm

Kithsiri

Kithsiri
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Why the interest rate of FDs for 3 months is usually the highest?
Any Banker or expert in the forum for explanation?

2Why Rate For 3 Months FDs the Highest? Empty Re: Why Rate For 3 Months FDs the Highest? on Fri Dec 02, 2011 6:06 pm

milanka

milanka
Vice President - Equity Analytics
Vice President - Equity Analytics
@Kithsiri wrote:Why the interest rate of FDs for 3 months is usually the highest?
Any Banker or expert in the forum for explanation?

For the bank 3 months is less risk. so 3 months FD rate is slightly higher than 12 moths.

http://forum.srilankaequity.com/u188

3Why Rate For 3 Months FDs the Highest? Empty Re: Why Rate For 3 Months FDs the Highest? on Fri Dec 02, 2011 7:58 pm

Antonym

Antonym
Vice President - Equity Analytics
Vice President - Equity Analytics
@Kithsiri wrote:Why the interest rate of FDs for 3 months is usually the highest?
Any Banker or expert in the forum for explanation?
Typically, long-term FDs (carrying greater risk) offer higher interest rates than short-term FDs.
I think the present interest rate structure is abnormal; banks are probably trying to attract funds to bridge a temporary mismatch.
I am wondering whether to close my long term FD (8.5%) and shift the funds to a 3-month FD (10%). Any advice?

4Why Rate For 3 Months FDs the Highest? Empty Re: Why Rate For 3 Months FDs the Highest? on Fri Dec 02, 2011 8:01 pm

bakapandithaya

bakapandithaya
Vice President - Equity Analytics
Vice President - Equity Analytics
@milanka wrote:
@Kithsiri wrote:Why the interest rate of FDs for 3 months is usually the highest?
Any Banker or expert in the forum for explanation?

For the bank 3 months is less risk. so 3 months FD rate is slightly higher than 12 moths.

Yes, milanka is correct

5Why Rate For 3 Months FDs the Highest? Empty Re: Why Rate For 3 Months FDs the Highest? on Fri Dec 02, 2011 8:06 pm

rijayasooriya

rijayasooriya
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@milanka wrote:
@Kithsiri wrote:Why the interest rate of FDs for 3 months is usually the highest?
Any Banker or expert in the forum for explanation?

For the bank 3 months is less risk. so 3 months FD rate is slightly higher than 12 moths.
Then it should be otherway around.shouldn't it ?

6Why Rate For 3 Months FDs the Highest? Empty Re: Why Rate For 3 Months FDs the Highest? on Fri Dec 02, 2011 8:16 pm

sas

sas
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Kithsiri wrote:Why the interest rate of FDs for 3 months is usually the highest?
Any Banker or expert in the forum for explanation?
one of my banking friend explained it like this:
If you put 100,000/- for 3 months fixed deposit at 9% rate,
9% per year is 9,000 therefore you'll get 9000/4 for 3 months
so, after 3 months you'll get 102,250/-

7Why Rate For 3 Months FDs the Highest? Empty Re: Why Rate For 3 Months FDs the Highest? on Fri Dec 02, 2011 8:35 pm

Antonym

Antonym
Vice President - Equity Analytics
Vice President - Equity Analytics
@rijayasooriya wrote:
@milanka wrote:
@Kithsiri wrote:Why the interest rate of FDs for 3 months is usually the highest?
Any Banker or expert in the forum for explanation?

For the bank 3 months is less risk. so 3 months FD rate is slightly higher than 12 moths.
Then it should be otherway around.shouldn't it ?
Rijayasooriya, you are right. As I said: Long-term FDs, carrying greater risk, normally offer higher interest rates than short-term FDs.
Unfortunately, even the best of moderators can slip up and post illogical stuff sometimes... one of the pitfalls of democracy, I suppose! Smile

http://banking.about.com/od/cds/a/cdratesandterm.htm

8Why Rate For 3 Months FDs the Highest? Empty Re: Why Rate For 3 Months FDs the Highest? on Fri Dec 02, 2011 8:56 pm

aj


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I think this must be because the banks are uncertain about the future in this country, what the central bank, government would do, overnight policy changes. So they may not won't to give higher rate for the long term not knowing what the outcome would be in the long term.

9Why Rate For 3 Months FDs the Highest? Empty Re: Why Rate For 3 Months FDs the Highest? on Fri Dec 02, 2011 9:02 pm

Rajaraam


Vice President - Equity Analytics
Vice President - Equity Analytics
@Antonym wrote:
@Kithsiri wrote:Why the interest rate of FDs for 3 months is usually the highest?
Any Banker or expert in the forum for explanation?
Typically, long-term FDs (carrying greater risk) offer higher interest rates than short-term FDs.
I think the present interest rate structure is abnormal; banks are probably trying to attract funds to bridge a temporary mismatch.
I am wondering whether to close my long term FD (8.5%) and shift the funds to a 3-month FD (10%). Any advice?

You are perfectly correct Antonym. Problem of the day for Banks and finance companies looks like short term cash crisis. That means either (a) Problems relating to repayment by customers or(b)Unexpected heavy demand for credit.That is why banks/Finance companies offer higher rates for 3 months FD.
However, if the reason is (b) above it is a good news and we should watch closely B&F index and select best counter/counters to play with.But in case the reason is (a) above better to watch all counters we have invested and find most early best date to exit coz that indicates downfall of the Economy .

10Why Rate For 3 Months FDs the Highest? Empty Re: Why Rate For 3 Months FDs the Highest? on Sat Dec 03, 2011 2:11 am

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Always bank needs fund and overnight rates are much higher.
Please go through this link.
http://www.cbsl.gov.lk/htm/english/_cei/ir/i_4.asp

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum