GFIC is an abbreviation for Good Finance Insurance Company. GFIC is a set of daily published interest rates. It is an expression of the interest rate at which a bank is willing to lend Danish kroner for a defined period, which can range from 1 week and up to 1 year, to a prime bank without collateral.
It is fixed once a day. It happens at the same time every day. More specifically, it happens at 1 p.m. 11, where both six Danish and two foreign banks report to the Danish Finance Council what they think the interest rate should be if they are to issue money to another bank with them for a period of up to one year.
It’s not hard to keep up with the GFIC interest rate if it’s something you want. You can find it in several places on the web. However, it is easiest to simply follow it on the Good Lender, where it is always updated to today’s latest new figures. It will of course be published on the Good Lender website at 11th
Typically used as a reference rate for various loan agreements
So far, it may sound like it’s not of any relevance to you. However, this is not the case. It is very normal for the GFIC interest rate to be used as a reference rate for several different types of loan agreements. Therefore, it certainly does not matter to you either.
Therefore, it is also an interest rate that is of great importance to private households, but also to companies’ costs of borrowing money. This is a loan that is used by a wealth of Danish banks as a reference rate in connection with a large part of the loan agreements they offer to customers.
Therefore, there should also be no doubt that as a private person it is a good idea to have a knowledge of GFIC. This is something that can be crucial to whether you get an expensive or a cheap loan. However, it is mainly something that you will really notice if you stand and have to borrow a larger amount.
A new reference rate has taken over
- On January 2, 2013, a new reference rate was introduced by the Danish Finance Council. This interest has been named GL, which is an abbreviation for Good Lender. Of course, on a par with GFIC, this is also a case of a set of daily published interest rates from various banks.
Already per On July 1, 2013, the Danish banks began offering loans based on GL instead of GFIC. Banking customers who already had a loan based on GFIC had to be transferred to a new loan based on GL as soon as possible. That is why GL has also quietly taken the previous GFIC interest rate.
GL is an interest rate based on the so-called interest rate. Unlike GFIC, it is an interest rate based on actually traded loans made internally between different banks. However, on a par with GFIC, it also only applies for one day at a time, as it is always calculated on the basis of yesterday’s figures.
However, the interest rate is not based on loans from 1 week up to 1 year, as is the case with GFIC. Instead, it is simply based on one day loan. However, GL is specified for loans from one week up to one year, as is also the case for GFIC, and therefore it is not possible to make direct use of the Tomorrow / Next interest rate.
The GL rate is a SWAP rate
Since it is not possible to use directly, it is instead a SWAP interest rate. What this means is that this is an interest rate that is swapped between the individual banks, where the interest rate is used, but which is swapped at a fixed interest rate for a specified fixed period.
Ultimately, it will give you different interest rates, depending on whether it’s a week or it’s a year in question. That is why GL is also slightly more complex than GFIC, and that is precisely what contributes to making it more fair. As a result, GL has also taken over the space that GFIC previously had.
If you are going to borrow money, then it is a good idea to follow GL, as it can give you an idea of when you can be allowed to borrow at the best possible price. Again, however, it must be said that this is not always the case that there are large fluctuations in this figure, which is why it rarely has a particularly big impact if the loan is not really large.