Interest Rate Update (September 2014)

The following graph shows movements in both the 3 month and 3 year Bank Bill yield rates, for the period January 2006 to September 2014.

These rates are wholesale rates which are net of any margin charged by financial institutions.

Since early 2013, rates have been relatively stable in comparison to the previous 12 to 24 months. It is predicted that the premium for longer term rates is more likely to rise than fall in the medium term.

Currently the 3 month wholesale Bill rate is 2.63% pa and the 3 year wholesale Bill rate is 2.93% pa, a premium of 0.3% pa or 30 basis points for the longer term.

This is a relatively low premium to pay, for those clients who like the certainty of fixed interest rates.