Due to a flurry of entrepreneurial activity both on the reservation and off, demand for capital from the Free Lakota Bank has sky-rocketed and has resulted in the increase of GDF interest rates to their original levels of 3.25, 5.25 and 7.25%, for 1, 2 and 3 year term contracts.
Term contract rates were reduced in 2013 due to a spike in new term contracts and excess capital. As the market demands, rates were adjusted to offset the increased supply in capital. In an objective banking system, interest rates are used as a throttle that responds to demands of the marketplace. When depositor capital exceeds demand from borrowers, rates decrease to slow the accumulation of capital. When capital is low and demand is high, rates increase to entice additional long-term savings and capital pool growth. Or, at least this is how a market lender is supposed to work.
For a limited time, existing GDF contract holders are invited to roll-over existing contracts to a new term, taking advantage of both the increased rates as well as the bank’s new monthly dividend feature to receive monthly payments of interest earned on term contracts.