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FIXED DEPOSIT TERMS
Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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mukiha wrote:Impunity wrote:mukiha wrote:In view of above and the fact that many UTs have 10k minimum investment, I still can't understand why people keep savings in fixed deposits! What %age will CIC pay for a deposit of say 100K for one month? Unit trusts returns are NOT based on the value of investment. Everybody gets the same percentage - whether you put in 10k or 10m! Secondly, the rates are evaluated on a daily basis. If today's return is 9%pa, everybody gets 9% p.a. (of course that means you divide the 9% by 365!!); if tomorrow it is 8%, everybody gets 8%. The rates are NOT negotiated with the investor before investment. You get what the fund earns on a day-to-day basis. To answer your question: Check the Daily Nation, for example, on the page that has stocks and forex tables - top right hand corner. CIC's yesterday's rate was 9.01% p.a.... but Britam was higher at 9.74% p.a. Actually, I am now considering moving the money to Britam.... Amana PAID 11.16% p.a. yesterday And you said that the %age is net profit, the 15% tax is already deducted? Please confirm. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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Impunity wrote:mukiha wrote:Impunity wrote:mukiha wrote:In view of above and the fact that many UTs have 10k minimum investment, I still can't understand why people keep savings in fixed deposits! What %age will CIC pay for a deposit of say 100K for one month? Unit trusts returns are NOT based on the value of investment. Everybody gets the same percentage - whether you put in 10k or 10m! Secondly, the rates are evaluated on a daily basis. If today's return is 9%pa, everybody gets 9% p.a. (of course that means you divide the 9% by 365!!); if tomorrow it is 8%, everybody gets 8%. The rates are NOT negotiated with the investor before investment. You get what the fund earns on a day-to-day basis. To answer your question: Check the Daily Nation, for example, on the page that has stocks and forex tables - top right hand corner. CIC's yesterday's rate was 9.01% p.a.... but Britam was higher at 9.74% p.a. Actually, I am now considering moving the money to Britam.... Amana PAID 11.16% p.a. yesterday And you said that the %age is net profit, the 15% tax is already deducted? Please confirm. Yes it is net; that's what they paid to my account.... give them a call for clarifications Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Elder Joined: 5/1/2010 Posts: 3,024 Location: Hapa
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MMFs for now Float like a butterfly, sting like a bee. - Muhammad Aliπ
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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mukiha wrote:Impunity wrote:mukiha wrote:Impunity wrote:mukiha wrote:In view of above and the fact that many UTs have 10k minimum investment, I still can't understand why people keep savings in fixed deposits! What %age will CIC pay for a deposit of say 100K for one month? Unit trusts returns are NOT based on the value of investment. Everybody gets the same percentage - whether you put in 10k or 10m! Secondly, the rates are evaluated on a daily basis. If today's return is 9%pa, everybody gets 9% p.a. (of course that means you divide the 9% by 365!!); if tomorrow it is 8%, everybody gets 8%. The rates are NOT negotiated with the investor before investment. You get what the fund earns on a day-to-day basis. To answer your question: Check the Daily Nation, for example, on the page that has stocks and forex tables - top right hand corner. CIC's yesterday's rate was 9.01% p.a.... but Britam was higher at 9.74% p.a. Actually, I am now considering moving the money to Britam.... Amana PAID 11.16% p.a. yesterday And you said that the %age is net profit, the 15% tax is already deducted? Please confirm. Yes it is net; that's what they paid to my account.... give them a call for clarifications Ok, they seem to yield more than a T Bill for the the same tenuere currently. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Member Joined: 2/15/2010 Posts: 128 Location: Kenya
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Is it possible to transfer ownership of a unit trust account to another person?
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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DtheK wrote:Is it possible to transfer ownership of a unit trust account to another person? The funds or the account? Can you transfer your bank account to some one else? NO But you can transfer the funds! Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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For Britam I came across an old document with the following conditions for a Money Market Fund investment:
Initial fees β 0
β’ Annual management fee β 2% p.a.
β’ Minimum investment amount β Ksh.100,000
β’ Minimum top β up amount β Ksh.10,000
β’ Initial Commission β 0.05% of investment amount + 0.025% monthly trailer
If this is still the case ,then CIC should be better because they only charge Ksh 1,000 joining fee and minimum investment is Kshs 10,000 i.e even if the rate for Britam is higher,this gets eaten into by the above charges...
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Rank: Member Joined: 2/15/2010 Posts: 128 Location: Kenya
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@Mukiha but then again a unit trust serves different purpose from a bank account.
A bank account is mostly not for investing but allows you to access services such as recieving and making payments thru different means.
A unit trust however is an investment in the same class as shares,T-bills and bonds.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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DtheK wrote:@Mukiha but then again a unit trust serves different purpose from a bank account.
A bank account is mostly not for investing but allows you to access services such as recieving and making payments thru different means.
A unit trust however is an investment in the same class as shares,T-bills and bonds. Can you transfer your CDSC account to another person? NO! But you can transfers the shares held therin. Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: Member Joined: 2/15/2010 Posts: 128 Location: Kenya
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thanks @mukiha the reason I wanted to find out is because I was thinking of a situation where one can borrow against his unit trust account,during the period that one is indebted the account's in the creditors name ukimaliza deni unarudishiwa.
Any reason this can't be done(legal)if there are any what are the options?
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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DtheK wrote:thanks @mukiha the reason I wanted to find out is because I was thinking of a situation where one can borrow against his unit trust account,during the period that one is indebted the account's in the creditors name ukimaliza deni unarudishiwa.
Any reason this can't be done(legal)if there are any what are the options? Why borrow? Why not use the funds in the Unit Trust for whatever you want to do? Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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mukiha wrote:DtheK wrote:thanks @mukiha the reason I wanted to find out is because I was thinking of a situation where one can borrow against his unit trust account,during the period that one is indebted the account's in the creditors name ukimaliza deni unarudishiwa.
Any reason this can't be done(legal)if there are any what are the options? Why borrow? Why not use the funds in the Unit Trust for whatever you want to do? @DtheK, i also ask, why take a loan secured by Fixed Deposit or Money Market Unit Trust? Why give these institutions your money for a low interest rate (low income to you) and yet borrow the same money at a crazy interest rate (high cost you'll pay for the loan)?
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Rank: Member Joined: 2/15/2010 Posts: 128 Location: Kenya
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the reason;
-When somebody can give you more than the much you have saved in your account.like saccos do when they give you 3x your savings.
This is better because interest is compounded and in most cases higher than offered by Saccos/banks.And you get the best rate regardless of amount saved(at least the same as everybody else in that trust)
-Or in the rare occurence that somebody can lend to you at a lower rate.
Now back to my original question can it be done?
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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DtheK wrote:the reason;
-When somebody can give you more than the much you have saved in your account.like saccos do when they give you 3x your savings.
This is better because interest is compounded and in most cases higher than offered by Saccos/banks.And you get the best rate regardless of amount saved(at least the same as everybody else in that trust)
-Or in the rare occurence that somebody can lend to you at a lower rate.
Now back to my original question can it be done? @DtheK, in case of my bank, one get a loan with security being Fixed Deposit (FDR). One is charged an interest rate ranging between 3-6% above the FDR interest rate. This loan rate is usually lower than the normal loan rate. .... The downside with this is that one has to provide Fixed Deposit amounting to atleast the same amount of the loan, meaning one is essentially borrowing their money at a cost. Worse, the interest rate on FDR is calculated by simple interest method while interest rate on the loan is calculated by compound interest method. Fanya hiyo hesabu .... thats the reason i have never understood why one should take a loan secured by 100% cash .... Q to you, name an institutions (even a sacco) which will lend you 3 times your cash savings at your said lower/same interest rate as the cash deposit rate
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Rank: Member Joined: 2/15/2010 Posts: 128 Location: Kenya
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@mwekez@ji here you go examplePlease note that 3x the amount saved in shares is the norm in saccos. However selling them can be tricky.There is no market and you can only sell to existing members.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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DtheK wrote:@mwekez@ji here you go examplePlease note that 3x the amount saved in shares is the norm in saccos. However selling them can be tricky.There is no market and you can only sell to existing members. They lend 3x the amount saved at an interest rate of 12% p.a. I can almost bet that the interest rate given on the amounts saved is far less than the 12% p.a. .... Tell us, what is the interest rate paid on the amount saved?
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Rank: Elder Joined: 6/23/2009 Posts: 13,501 Location: nairobi
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why do saccos suggest that one can borrow x3 their savings while it is ideally x2 considering that you are being lent some of your own money!
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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obiero wrote:why do saccos suggest that one can borrow x3 their savings while it is ideally x2 considering that you are being lent some of your own money! Because you continue to earn interest(dvdd) on your savings. The opposite of courage is not cowardice, it's conformity.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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DtheK wrote:the reason;
-When somebody can give you more than the much you have saved in your account.like saccos do when they give you 3x your savings.
This is better because interest is compounded and in most cases higher than offered by Saccos/banks.And you get the best rate regardless of amount saved(at least the same as everybody else in that trust)
-Or in the rare occurence that somebody can lend to you at a lower rate.
Now back to my original question can it be done? You didn't get my answer; It is NO. You cannot transfer the account; but you can transfer the funds. SACCOs give loans against deposits saved in the SACCO. If you want to enjoy the 3x borrowing scheme, you should transfer your FUNDS from the unit trust to the SACCO - many will accept lump sum transfers but a few will not. In addition, many SACCOS will tell you to keep the savings with them for a certain minimum duration - typically between 3 and 6 months - before you can qualify to use it against a loan. So; the answer to your original question is an emphatic NO; In the same breath; you cannot transfer a bank account, you cannot transfer a [shares] CDSC account, and you cannot transfer a [T-bill & bond] CDS account.... only the contents of these accounts are transferable. Now, may I ask, what type of unit trust do you have - money market or equity? Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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