Interest Update - Important Information for Bank Depositors
•
by t'jelle Bank
Hello depositors of t'jelle Bank and all those who are reading this.
I (AidenAstrup) and my Financial Officer (Sebastian Locke) have been meeting numerous times over the past week in the real world going over financial information, investment opportunities, and the series of offers put before us. After much talking and numbers, we have decided to make a few changes that will improve the safety, quality and effectiveness of t'jelle Bank. Some of these you might not even notice, others you will. We have changed the way we organize our loan system, created new orgs to increase efficiency, but there is one major change that we need to inform you of.
Since t'jelle Bank's creation, we have offered the highest interest rates in the New World over any bank (that lasted more than 2 weeks). In fact, we currently offer more than double the interest rates of any other competitor. This sounds fantastic, but it means that we must then in turn generate higher returns on investments in order to cover that interest. That hasn't posed too much of a problem since we currently have reserves that can back up interest rates for the next 4 months. It does put us at a disadvantage however, when in negotiations for investments if our competitors can offer half the interest rate as us.
When we offer higher interest rates on loans, it increases their risk of defaulting if they are running against others who can offer lower prices since they have to pay back less to a bank. Higher interest then also raises prices which is no good for anyone.
Due to these issues, we have decided after much discussion to lower interest rates. They will still be around 30% higher than our competitors, and we won't be making any profit off of this. As our interest rates for deposits lower, so will our interest rates on loans. Here is the proposed breakdown for new interest rates:
4.25% monthly for Citizen Deposits Accounts
5% for Citizen Investment Accounts
5.25% for Company Deposit Account
5.75% for Corporate Holdings Accounts
In accordance with bank policy this change will not take effect until October 22nd 2009 for existing and new depositors. On October 22nd, all interest for deposits that have been in the bank for a month will change to above proposal.
This change will allow us to better serve our customers and the citizens of eRepublik. We ask that you forward all questions, comments and concerns to this organization.
Facebook
Twitter
Discord
Comments
damn, that's a massive drop in interest rates; all of a sudden the return doesn't seem so attractive.
It's a pity, I was going to create a deposit. But now the hard worker medal seems to be more profitable.
Indeed it is quite a drop, but we still offer rates that higher than a majority of other investment opportunities.
ye, but a 50%+- interest rate cut is just ridiculous. I'm sorry I signed up for a savings account yesterday and didn't wait just 1 more day. I'll be looking to move my money elsewhere. The opportunity cost of holding my money in this saving account as opposed to letting it sit in my citizen account is negligible.
How is 5% the same as 0%?
note the terminology I used, 'negligible'; whether I'm earning 2 - 3 gold on my capital or 0 gold, it's a rather insignificant amount
Ah, true. I have said since the beginning however, that this bank was not a "Get Rich" bank. We simply offer an alternative to letting your gold sit in your account earning nothing.
Also note that we offer dozens of services in addition to accounts free of charge.
I understand that and I think the extra services you offer are great, but the point of attraction here to me was your extremely high and attractive interest rates you offered. IMO, a company which earns decent margins has no need to let their large amount of capital sit in a savings account for such a small return. In my case, I was planning to invest well over 100g with you which would earn me 5.25 gold a month in interest (0.17g a day) - based on your new rates. An amount like 0.17g is trivial and really petty cash to someone who has a large amount of capital to play with and to someone who makes a decent amount of daily profit. I think you need to reconsider the account types, rates and benefits and offer more attractive offers to the higher accounts.
4.25% monthly for Citizen Deposits Accounts
5% for Citizen Investment Accounts
5.25% for Company Deposit Account
5.75% for Corporate Holdings Accounts
are you crazy?
the inflation rate is 10.4% making your real interest rates about -5%!
I have to admit for a long time I did not invest in your bank at all because your interest rates were 5%, when they went up to 10% I decided to put all my gold in rather than use it. Now that interest rates have dropped over 50% i have removed all my gold.
50% drop is simply too much. I can loan it to another citizen for at least 15% a month,
Also though I should point this out:
I HAVE NEVER SEEN ANOTHER BANK OFFERING LESS THAN 5% INTEREST.
YOU DO NOT OFFER 30% MORE THAN YOU COMPETITORS
More like 30% less!
Interesting news.
Atleast I have a month to think it over 🙂
I will have to think over if I want my money to stay with you guys after the next interest update for me which is 1 week before the rates are probably going to go down.
Oh well, still 5.75% is not so bad, REAL banks in RL offer you that per year.
If you deposit a decent ammount like 400g you still get quite some per month.
12MONKEYS I CAN HEAR YOU JUST FINE. The Authority Bank of Commerce offers 3.25%, it is currently our only competitor.
As for inflation, you are probably getting that number from the game interface...not a good idea. That is usually months off or marjorly off. I would suggest using a website that gets it from the API...which would show that (excluding August)the gold to USD rate has remained pretty much the same. It varies from 53-54 USD per 1 Gold.
Victory Bank- 8.5%
Wellington Chase- 10%
ETC
Maybe you dont understand- I like the bank, its a really good bank, the services you offer and the quality of the service is on the whole excellent the only thing I dont like are the new rates!
If you had decreased them by 25% I might have thought, oh well not that big a loss but you have decreased them over 50%, in my view and (by looking at previous comments) other peoples view is that it is simply to big a decrease!
12monkeys - I did hear about Victory Bank once, and Wellington Chase I have never heard of. I only count competition as banks which are run by well known individuals who have shown they can be trusted. I have seen many of the banks that don't fall into that category just disappear.
Note that we have a month left to increase the interest rates, we have thought of a system that would allow the first two accounts to keep the proposed interest rates, but the Company/Corporate accounts would have higher interest rates near what they used to be.
That's too bad. Honestly though, I am not surprised.
And yes 5% is better than 0%.
Lol my bank, CIBC, gives out 3-8% interest PER WEEK. This is a complete rip-off.
I had just opened an account, intending to deposit my excess gold. Then I came back to eRep to read this... Hmm am seriously thinking twice now.