mortgages and deposit accounts in the wake of Monday's Budget.

The Budget Statement announced plans to abolish the seven percent ceiling on interest rates, reduce the ten percent Overseas Investment Tax to 0.25 percent and to end restrictions on foreign currency borrowing.

The Bank of Bermuda and Bank of Butterfield, Bermuda Mortgage & Finance and Butterfield Mortgage & Finance all cut rates on certain loans, mortgages, and savings accounts on February 1 in anticipation of the move.

They also said the moves were aimed at boosting the economy and bringing local rates into line with those prevalent in the US.

Now Gibbons Deposit Company has reduced its Call and Time Deposit rates by one half percent, and increased the holding period to qualify for the seven percent rate to two years from one year, effective yesterday. The interest rate payable by the company's performing loans will be reduced by one half percent as of March 1, 1994.

Also announcing reductions in rates was LP Gutteridge Mortgage & Finance. The company has reduced its short term deposit rates.

Its six month call account is reduced by one quarter percent, and its three month call account is reduced by one half percent.

Its seven-day deposit account is down to three percent.

Mr. Terry Faulkenberry, vice president at LP Gutteridge Mortgage & Finance, said the company was trying to maintain interest rates on longer term money.

"We are pleased that we have maintained our five year fixed term deposit -- the longest fixed term deposit we have -- at seven percent,'' said Mr.

Faulkenberry.

LP Gutteridge Mortgage & Finance is "digesting the Budget'' before reaching any decisions about loan rate changes.

The Budget, low overseas rates, and the Bermuda bank's recent decision to drop rates were all factors influencing the company's decision to trim its own rates.

Mr. James Gibbons, financial director at Gibbons Deposit Company, said that the freeing of interest rates would probably bring Bermuda dollar interest rates into line with those in the US -- if the Bermuda dollar remained linked to the US dollar.

Mr. Gibbons said the company still intended to offer the most competitive rates in Bermuda, regardless of rates falling "across the board''.

The changes to the financial system should be made "gently'', said Mr.

Gibbons.

"Therefore, we have restructured in a way that does not undermine the system.

It is just the beginning of the process.'' Bermuda Savings and Loans managing director Mr. Campbell McBeath was reportedly locked in a meeting to consider interest rate realignment when attempts to contact him were made yesterday.

Somers Mortgage and Finance, a wholly-owned subsidiary of Bermuda Commercial Bank, will shift its deposit account and mortgage rates soon, said general manager Mrs. Betty Brown.

A rate review had been underway prior to the Budget, which anticipated changes in the Budget, and was also intended to encourage savers to place long term deposits with the company, she said. The seven percent rate on the company's five-year deposit account would not change, she said.