Mashreq Egypt launches new five-year certificate of deposit

Mashreq Egypt announced on Sunday the launching of its new five-year certificate of deposit in Egypt, with fixed interest rates of 10.35 percent per annum to be paid annually, 10.30 percent semi-annually, 10.25 percent quarterly, and 10.10 percent monthly.

The medium-term investment product will offer customers instant liquidity, capital security, a stable source of return, and a guaranteed return rate, considered to be one of the “best” rates in the market, the company said in a released statement.

“Mashreq Egypt’s five-year certificate of deposit guarantees the highest fixed monthly, quarterly, or yearly return whether you are a customer or not,” said Tareq Fawzi, country manager of Mashreq Egypt, in the statement.

According to the company, holders of the certificate will also have an additional 1 percent above the basic saving rate on the saving account.

“The launch of our five-year certificate of deposit will enable customers to increase their savings in the medium-term according to their financial needs and provide them with a selection of convenient saving options at a remarkably attractive interest rate with the freedom of choice of interest frequency payment,” said Fawzi.

According to Fawzi, the five-year certificate of deposit is an expansion of Mashreq’s product line, where the customer can have the flexibility to choose from a wide range of certificates whether for tenor of 3 or 5 years based on customer choice.

Moreover, the company stated that they continue to offer customers the three -year certificate of deposit as the bank increased the rates of the three-year certificate to be 10.25 percent per annum paid annually, 10.20 percent semi-annually, 10.15 percent quarterly, and 10 percent monthly.

“With a minimum deposit of LE 5,000 and one of the highest fixed interest rates among different frequency payment, our certificates of deposit will provide customers with fixed term deposits that give them peace of mind, while their wealth accumulates. In addition it reinforces our strategic approach of introducing convenient range of products to our customers,” Fawzi added.

Founded in 1967 as Bank of Oman, Mashreq is currently one of the largest banks in the United Arab Emirates. Currently, the bank operates in several countries across the Middle East including Qatar and Egypt.

[Source- thedailynewsegypt]

Reinvest in fixed deposits

Babu Chettiar, who is 35 years old, is employed with a manufacturing company, while his 32-year old wife Sudha is employed with an IT company based in Chennai. They have two children aged 10 and 8 years. Both Mr Babu’s and Ms Sudha’s parents (in the age group between 65-70 years) live with them. The family headcount is thus eight persons.

They live in a large four bedroom house owned by Mr Babu’s father. They have two cars and have holdings in real estate and jewellery. Bank deposits of Mr Babu and his wife are around Rs 3 lakh. The aged parents get sufficient pension and have their own kitchen and take care of all their requirements independently. The medical needs are also assured through their erstwhile government employer.

This leaves us with only management of finances for Mr Babu and his immediate family. Their household expenses (driver’s salary, children’s schooling and other expenses, etc) amount to Rs 50,000 a month. They have a combined income of Rs 15 lakh per annum, post income-tax.
Their PF accumulation is Rs 12 lakh. Their bank balance is Rs 15 lakh, all in fixed deposit. They have an insurance policy of Rs 50 lakh. Mr Babu’s wife has jewellery worth Rs 30 lakh. The savings potential per year is Rs 6 lakh.

Financial goals

The goals to be achieved are medium-term and beyond. The educational expenses for the children till post-graduation shall require Rs 50 lakh, while marriage will take away another Rs 25 lakh. The maintenance of standard of living shall require accumulation of Rs 3 crore (assuming longevity as 85 years). The overall financial goals thus aggregate Rs 3.75 crore.

Where is he now?
Since there are no loans outstanding, the overall net worth is Rs 69 lakh. The liquidity in bank is sufficient and can help meet contingency requirements. Cash available shall help meet three years of living expenses.

Recommendations
The following is the suggested action plan to save and invest `6 lakh per year for the next 25 years (period until retirement) and assuming that the couple will continue to work till retirement:

Since the couple are in private sector and do not enjoy medical benefits as their parents, a family floater be taken to cover medical health and critical illness for self and the entire family for Rs 10 lakh (premium Rs 8,500 a year);

* Invest Rs 10,000 per month through an SIP into gold ETFs or mutual fund schemes. This will hedge against inflation and help you to purchase physical gold at later stage;

* Invest Rs 25,000 per month into two well performing diversified equity schemes. This will help in meeting educational needs of children;

* Foreclose your Rs 12 lakh fixed deposits. Of which, 50 per cent could be reinvested for 3-5 years at the higher rates prevailing now, while the balance 50 per cent could be invested into a fixed maturity plan for 1-3 years to gain on twin benefits of indexation and post tax efficiency;

* A sum of Rs 70,000 per annum could be invested in the names of the couple or their children, which will mature after 14 years to meet marriage expenses of children.

* A sum of Rs 5,000 per annum could be deposited in a recurring deposit for five years or more.

* Another Rs 50 lakh of term insurance could be contemplated by the couple (cost Rs 20,000 per annum)

* Mr Babu and his wife must also draw up a will in each other’s name to bequeath properties.

For more information visit to: http://deal4investments.blogspot.com/

[Source- Deccan chronicle]

For banks, Casa ratio outlook is dim

Just when banks need them the most amid rising cost of funds, low-cost deposits may not come to their rescue.

Rising fixed deposit rates have prompted depositors to shift their funds from savings deposit accounts. At the same time, the share of current account balances in total deposits have also started shrinking, as companies and businesses don’t want their funds lying idle in these accounts.

This is likely to cap any increase in the share of low-cost current account savings account (Casa) deposits for banks and foil the scope for margin improvements in the near term.

“I don’t think for the banking sector as a whole the Casa ratio will go up. There is a larger differential between the savings and fixed deposit rates. The customers are much more conscious now and don’t want their deposits earning lower rates in savings deposits,” Chanda Kochhar, managing director and chief executive of ICICI Bank, told Business Standard.

“Even in current accounts, with the cost of money going up, people don’t want to leave idle cash balances. They are using it for projects, investments and working capital requirements. Whether it is the individual or the corporate, they are managing money more efficiently,” she added.

The country’s largest private sector bank closed the April-June quarter with a Casa ratio of 41.9 per cent. Kochhar expects the share of Casa to remain at around 40 per cent in the coming quarters.

While higher rates offered on fixed deposits led to 7.8 per cent growth in term deposits since the start of this financial year, demand deposits have narrowed by 12.6 per cent since April, latest data from Reserve Bank of India shows. On an annual basis, term deposits have grown 21.6 per cent and demand deposits have shrunk 7.6 per cent.

“Mostly current accounts are used for settlement purposes in capital market transactions. Currently, markets are dull, so there is not much transactions in these accounts. As of now there is not much growth in current account deposits,” R K Bansal, executive director and group head, retail banking at IDBI Bank, said. He expects the expansion of current deposit accounts for the public sector bank to be slower this year than the usual annual growth of 15-20 per cent.

While many banks have started offering attractive schemes like waiver of minimum balance requirements and the option of insurance cover to mobilise savings deposits, lenders are now exploring options to take similar initiatives for current account deposits.

“Growth in current account as of now is static. We are thinking of offering customers some incentives to open current accounts from the next month. We are aiming to grow our current deposits by 10 per cent by March,” Ashok Dutt, executive director at Dena Bank, said.

For more information visit to: http://deal4investments.blogspot.com/

[Source-BS]