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Faulu Kenya now beats T-Bills for fixed deposits
Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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surely whats the argument here??lets just crunch the no.s and get the real value of both investments... possunt quia posse videntur
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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maka wrote:surely whats the argument here??lets just crunch the no.s and get the real value of both investments... http://www.centralbank.go.ke/index.php/calculatorpossunt quia posse videntur
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Rank: New-farer Joined: 4/1/2013 Posts: 20
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Are we really holding this discussion ? With a t-bill you earn your discount upfront less witholding tax and give CBK the net.
A bank FDR is always more liquid and less punitive than a t-bill. Should you require your money before the maturity of the tenor, you can always get it back from the bank and the worst is that you will forfeit the interest. But a 182-day t-bill would be a nightmare to liquidate.
A little secret. If you have a reasonable figure (>5mn),walk in to a newly opened branch of any top-tier bank and ask the manager to give you the best rate. You will be shocked how much backward he is willing to bend. If the figure is 100 million, you will just have secured yourself a lunch date with the CEO.
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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Banker wrote:Are we really holding this discussion ? With a t-bill you earn your discount upfront less witholding tax and give CBK the net.
A bank FDR is always more liquid and less punitive than a t-bill. Should you require your money before the maturity of the tenor, you can always get it back from the bank and the worst is that you will forfeit the interest. But a 182-day t-bill would be a nightmare to liquidate.
A little secret. If you have a reasonable figure (>5mn),walk in to a newly opened branch of any top-tier bank and ask the manager to give you the best rate. You will be shocked how much backward he is willing to bend. If the figure is 100 million, you will just have secured yourself a lunch date with the CEO. Aih mboss! Ati nini? I have just done a cheque for KSh90,576.05 which I will invest in one-year t-bill - issue 1897/364. This money will earn 12.504% interest and come 14 April 2014, I will get my KSh90,576.05 back plus KSh9,423.95 interest..... making a total of KSh100,000. Clearly, the interest will be paid AFTER maturity!!
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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chiaroscuro wrote:Banker wrote:Are we really holding this discussion ? With a t-bill you earn your discount upfront less witholding tax and give CBK the net.
A bank FDR is always more liquid and less punitive than a t-bill. Should you require your money before the maturity of the tenor, you can always get it back from the bank and the worst is that you will forfeit the interest. But a 182-day t-bill would be a nightmare to liquidate.
A little secret. If you have a reasonable figure (>5mn),walk in to a newly opened branch of any top-tier bank and ask the manager to give you the best rate. You will be shocked how much backward he is willing to bend. If the figure is 100 million, you will just have secured yourself a lunch date with the CEO. Aih mboss! Ati nini? I have just done a cheque for KSh90,576.05 which I will invest in one-year t-bill - issue 1897/364. This money will earn 12.504% interest and come 14 April 2014, I will get my KSh90,576.05 back plus KSh9,423.95 interest..... making a total of KSh100,000. Clearly, the interest will be paid AFTER maturity!! Aih Mboss! Interest is paid upfront!! You had KES 100,000/- to invest but CBK has taken KES 90,576.05 and left you with your interest of KES 9,423.95 (net of withholding tax). Now go invest that interest of KES 9,423.95 and watch yourself beating the Faulu FDR returns
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Rank: Veteran Joined: 12/23/2010 Posts: 1,229
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mwekez@ji wrote:chiaroscuro wrote:Banker wrote:Are we really holding this discussion ? With a t-bill you earn your discount upfront less witholding tax and give CBK the net.
A bank FDR is always more liquid and less punitive than a t-bill. Should you require your money before the maturity of the tenor, you can always get it back from the bank and the worst is that you will forfeit the interest. But a 182-day t-bill would be a nightmare to liquidate.
A little secret. If you have a reasonable figure (>5mn),walk in to a newly opened branch of any top-tier bank and ask the manager to give you the best rate. You will be shocked how much backward he is willing to bend. If the figure is 100 million, you will just have secured yourself a lunch date with the CEO. Aih mboss! Ati nini? I have just done a cheque for KSh90,576.05 which I will invest in one-year t-bill - issue 1897/364. This money will earn 12.504% interest and come 14 April 2014, I will get my KSh90,576.05 back plus KSh9,423.95 interest..... making a total of KSh100,000. Clearly, the interest will be paid AFTER maturity!! Aih Mboss! Interest is paid upfront!! You had KES 100,000/- to invest but CBK has taken KES 90,576.05 and left you with your interest of KES 9,423.95 (net of withholding tax). Now go invest that interest of KES 9,423.95 and watch yourself beating the Faulu FDR returns I prefer to do my mental maths like @mwekez@ji. Treat it as interest paid upfront, available for immediate re investment.
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Rank: Veteran Joined: 11/17/2012 Posts: 1,461 Location: Ngong Forest
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Haya kwa sisi wazee wangumbaru:
CBK Wants 100,000 from u @ 12.504%
After 12 months this adds to 100,000 + 12504[interest]=112,504
Withholding tax 15% of 12504=1875.60
Total profit = 12504 - 1875.60 =10628.40
In reality after 12 months you should get 100000+10628.40=110628.40
But you didnt give CBK 100K but 100K-10628.40[interest]=89371.60
So after one year they give you 100K and NOT 110628.40
Sasa jameni l give CBK 89371.60 NOW l get 100K AFTER 1 year where is the upfront interest payment tafathari?
Kwanini mambo ya pesa huwa always complicated?
Like why should CBK not just ask u to loan them 89371.60 @12.504% annually?
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Ngong wrote:Haya kwa sisi wazee wangumbaru:
CBK Wants 100,000 from u @ 12.504%
After 12 months this adds to 100,000 + 12504[interest]=112,504
Withholding tax 15% of 12504=1875.60
Total profit = 12504 - 1875.60 =10628.40
In reality after 12 months you should get 100000+10628.40=110628.40
But you didnt give CBK 100K but 100K-10628.40[interest]=89371.60
So after one year they give you 100K and NOT 110628.40
Sasa jameni l give CBK 89371.60 NOW l get 100K AFTER 1 year where is the upfront interest payment tafathari?
Kwanini mambo ya pesa huwa always complicated?
Like why should CBK not just ask u to loan them 89371.60 @12.504% annually?
The DISCOUNT is upfront since the VALUE at purchase is 100,000 but you just paid 89371.60 Please note the T-bill are in tranches of 100k Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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Pesa Nane wrote:Ngong wrote:Haya kwa sisi wazee wangumbaru:
CBK Wants 100,000 from u @ 12.504%
After 12 months this adds to 100,000 + 12504[interest]=112,504
Withholding tax 15% of 12504=1875.60
Total profit = 12504 - 1875.60 =10628.40
In reality after 12 months you should get 100000+10628.40=110628.40
But you didnt give CBK 100K but 100K-10628.40[interest]=89371.60
So after one year they give you 100K and NOT 110628.40
Sasa jameni l give CBK 89371.60 NOW l get 100K AFTER 1 year where is the upfront interest payment tafathari?
Kwanini mambo ya pesa huwa always complicated?
Like why should CBK not just ask u to loan them 89371.60 @12.504% annually?
The DISCOUNT is upfront since the VALUE at purchase is 100,000 but you just paid 89371.60 Please note the T-bill are in tranches of 100k Put it in anothet way. Interest is on 100k but you give them 89,371.60. This(upfront) is easy to see! When it comes to trading it's more dificult! The opposite of courage is not cowardice, it's conformity.
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Rank: Elder Joined: 3/2/2009 Posts: 26,331 Location: Masada
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jerry wrote:Pesa Nane wrote:Ngong wrote:Haya kwa sisi wazee wangumbaru:
CBK Wants 100,000 from u @ 12.504%
After 12 months this adds to 100,000 + 12504[interest]=112,504
Withholding tax 15% of 12504=1875.60
Total profit = 12504 - 1875.60 =10628.40
In reality after 12 months you should get 100000+10628.40=110628.40
But you didnt give CBK 100K but 100K-10628.40[interest]=89371.60
So after one year they give you 100K and NOT 110628.40
Sasa jameni l give CBK 89371.60 NOW l get 100K AFTER 1 year where is the upfront interest payment tafathari?
Kwanini mambo ya pesa huwa always complicated?
Like why should CBK not just ask u to loan them 89371.60 @12.504% annually?
The DISCOUNT is upfront since the VALUE at purchase is 100,000 but you just paid 89371.60 Please note the T-bill are in tranches of 100k Put it in anothet way. Interest is on 100k but you give them 89,371.60. This(upfront) is easy to see! When it comes to trading it's more dificult! Its upfront Jamaneni!Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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