Rank: Chief Joined: 5/31/2011 Posts: 5,121
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For Sport wrote:Ngong wrote:mwekez@ji wrote:Impunity wrote:mwekez@ji wrote:iMANI wrote:@mwekez@ji
Most term loans are repayable in monthly instalments, hence, I do not understand where you get the Kes 149,342?
Anyway, true MOST banks will never loose money in a lending arrangement, but if you're keen enough, you will actually pull this one off...I'm speaking from a real scenario as previously described where the loan is on reducing balance and FDR is on simple interest.. My example above seems complex for you so i choose to use your example where your profit in the loan arrangement is KES 24,605 after 36 months. If in your example you used your KES 1M therefore avoiding the borrowing and then opened a recurring deposit account where you deposit the KES 34,177 p.m., for 36 months, at an interest rate of 10% p.a., compounded annually, you would make a profit of KES 199,600 after the 36 months unlike the meager KES 24,605 in the loan arrangement. You may use this Recurring Deposit Calculator to confirm the hesabu >>> https://www.corpbanknet.com/Recurr_deposit_Calc.html. That takes me back to the question, why take a loan that is 100% secured by cash. Its just like giving the bank your money at a low interest rate then borrowing it at a high interest rate. Your monthly loan repayments gives the bank more money for onward lending making the bank richer. .... why not make yourself richer by atleast using the cash then opening a recurring deposit account as explained above Which bank offers the recurring deposit facility in Kenya?  My Bank >>> http://www.imbank.com/accounts/recurring-deposits/ @Mwekezaji saidia,what is recurring deposit in simple terms please? Fancy way of saying that you save by effecting a standing order so that some amount is deducted from your regular account and credited to your savings account periodically. For Sport wrote:Oops. Just looked. Looks like its more than just saving through a standing order. The interest rate is fixed depending on saving period and is better than what you'd get from a regular savings account. As noted by @For Sport, a recurring deposit is a type of term deposit. It requires one to make deposit of a specific amount every month to the recurring deposit account for a period of say one year. It enables one to accumulate savings while at the same time earning high interest rates as ordinary fixed deposit account
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