Home > Daily Journal, Smart Money > NZ$ at 1.0843 exchange rate with 8.35% Interest

NZ$ at 1.0843 exchange rate with 8.35% Interest

April 24th, 2008

I love NZ$ fixed deposit, maybe because I have a good start with it. Last 2 weeks or so, the exchange rate was at 1.12 which I wouldn’t look at it at all.  Currently, the exchange rate is 1.0843.

If you have an account with the bank and you transact over the web, you can enjoy Tier 3 interest rate of 8.35% for 6 mths at Tier 1 principal amount.

Tier 1 Principal is NZ$10k to NZ$49,999 at 8.15% for 3 mths

Tier 3 Prinicipal Amt is NZ$100k to NZ$249,999 at 8.35% for 6 mths


Based on NZ$10,000 at 1.0843 = S$10,843.00.
Interest for the 6mths is NZ$417.50. (8.35%)
Let’s assume, on maturity, the exchange rate remains, i.e bank buy back at 1.0586.
If you take out the interest only and after conversion, your S$ interest amount is NZ$417.5 x 1.0586 = S$441.9655
Meaning your effective S$ interest rate is 441.9655 / 10,843.00 = 4.076%

However, if you wish to take out the principal and the interest rate, then
NZ$10,417.50 x 1.0586 = S$11,027.965 – S$10,843.00 = S$184.965/S$10,843.00 = 1.7% is the effective S$ interest rate.

BUT, what if the exchange rate increases?  Good Luck! What if it goes SOUTH, God Bless US!

Please note Exchange Rate changes EVERYDAY! 

Investing and Growing Money is a long term process.  This is not for quick money. But then, better then S$ Fixed Deposit!

Correct me if my calculation is “SALA”.

Daily Journal, Smart Money

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