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Faulu Kenya now beats T-Bills for fixed deposits
Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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jerry wrote:@guru, (1) are you saying you can't invest 90.9M at 10% interest in a fixed acc and get 100M at end of the period? (2) if in your scenario above you give 90.9M to CBK and not 90M to get 100M there's nothing like upfront!! H-a-a-k-u-n-a-a-a ... @jerry, clear your brain's cache and re-read @guru's post. An archimedes moment -EUREKA- will just happen.  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:jerry wrote:@guru, (1) are you saying you can't invest 90.9M at 10% interest in a fixed acc and get 100M at end of the period? (2) if in your scenario above you give 90.9M to CBK and not 90M to get 100M there's nothing like upfront!! H-a-a-k-u-n-a-a-a ... @jerry, clear your brain's cache and re-read @guru's post. An archimedes moment -EUREKA- will just happen. It's a Sunday and it's clear enuf! Why don't you ans me directly...(1)...(2)... The opposite of courage is not cowardice, it's conformity.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Lets just agree that the discount we get on the tbills acts as the interest upfront! Because the points given by @jerry are valid! Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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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!! @chiaroscuro. Your example was "hijacked" and distorted I'm afraid. What we need to factor-in is witholding tax! The idea that you must have had 100,000/= but gave CBK less doesn't hold water. The opposite of courage is not cowardice, it's conformity.
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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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guru267 wrote:Lets just agree that the discount we get on the tbills acts as the interest upfront!
Because the points given by @jerry are valid! Thanks @guru267. Let's keep the Wazua spirit alive. The opposite of courage is not cowardice, it's conformity.
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Rank: Member Joined: 3/10/2008 Posts: 301 Location: Abu Dhabi
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Interesting....
Thing is, there's no upfront interest. Ppl get confused with the round figure aspect, which if you ignore, its all the same i.e. cbk is using the maturity amt in round figure for their convinience and mkt norm
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Rank: Veteran Joined: 6/17/2009 Posts: 1,627
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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 @mwekezaji ..suppose he had kSh 90 577 in his acaccount ,you still insist he has kSh 9423.95 to invest after he makes the cheque to CBK ?....interest is paid at maturity less witholding tax ...closed .
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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cnn wrote: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 @mwekezaji ..suppose he had kSh 90 577 in his acaccount ,you still insist he has kSh 9423.95 to invest after he makes the cheque to CBK ?....interest is paid at maturity less witholding tax ...closed . 2 lessons to @cnn 1. Minimum investment in TBills is KES 100,000/- and thereafter in multiples of KES 50,000/- 2. Discount is the only return an investor earns on Treasury bills and it is awarded upfront. To a layman, this discount is the interest. Read more here >>> http://www.centralbank.go.ke/in...ategorised/222-read-more
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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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@mwekez@ji.. I'm not able to open the CBK site using my phone but what we need is the step-by-step workings leading to 90,576.05 starting with 12.504%. The opposite of courage is not cowardice, it's conformity.
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Rank: Veteran Joined: 11/17/2012 Posts: 1,461 Location: Ngong Forest
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jerry wrote:@mwekez@ji.. I'm not able to open the CBK site using my phone but what we need is the step-by-step workings leading to 90,576.05 starting with 12.504%. I have done this above using the figures just go through the maths! NOTHING UPFRONT! Using @jerry example: Give CBK 90 bob instead of 100bob Get 100bob after 12 months! Jameni hii upfront discount/interest iko wapi? Ama tujoin masomo ya wazee kwa ufupi ngumbaru! YOU JUST ASSUME CBK HAS GIVEN YOU THE 10 BOB NOW
THEY HAVENT!
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Faulu Kenya now beats T-Bills for fixed deposits
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