Access Bank, Zenith Bank, Stanbic IBTC, 11 others increase interest rates on savings deposits

Nigerian banks have increased interest on deposits following the hike in Money Policy Rates (MPR) by the Central Bank of Nigeria (CBN).

At its last MPR meeting, the CBN raised interest rates by another 25 basis points, the sixth consecutive increase in the past 12 months, to 18.75%, from 18.50% to increase efforts to curb rising inflation.

CBN raises interest rates

The apex bank also narrowed the asymmetric corridor around MPR to +100/-30 from +100/-700 basis points.

MPR represents the interest rates determining other interest rates in the financial system.

As a result, banks are expected to increase the minimum interest rate in compliance with the CBN policy, and pegged the minimum rate on savings account deposits at 30% of MPR.

CBN said: “Effective August 1, 2022, the negotiable minimum interest rate on local currency savings deposits shall be 30% of MPR. This supersedes our letter dated BSD/DIR/GEN/LAB/13/052 on the subject. September 1, 2020.”

In an email to customers, Standard Chartered Bank in Nigeria said that interest rates on its Savings Accounts have been revised upwards.

The bank said: “Please note that credit interests are computed on daily account balances, and withdrawals are limited to 4 per month to qualify for interest payment.”

Also, Stanbic IBTC, in an email to its customers, said that all its product offerings linked to the Monetary Policy Rate will be adjusted accordingly, effective July 25, 2023.

Stanbic said: “Dear Esteemed Client, following the recent upward review of the Monetary Policy Rate by the Central Bank of Nigeria (from 18.50% per annum to 18.75% per annum), please be informed that all product offerings linked to the Monetary Policy Rate will be adjusted accordingly. This is effective from July 25, 2023.”

Savings rate hits all-time high of 5.18%

BusinessDay reports that the deposit rate rose to an all-time high of 5.18% as of June 2023, data from CBN said. Interest rates jumped from 2.96% in 2006 when CBN began publishing money market indicators.

The increase in deposits resulted from hikes in the Monetary Policy Rate. According to information on the CBN website, about 11 banks already pay their customers an average interest rate savings deposit above 5.18%.

Access Bank, Citibank, Fidelity, Heritage, Polaris, Premium Trust, Premium Trust, Sterling Bank, Titan Trust, Unity Bank, Wema Bank, and Access Bank.

Standard Chartered gave a 5.31% average deposit rate; Coronation Bank, 6.78%; Ecobank, 4.65%; FCMB, 1.5%; First Bank of Nigeria, 4.20%; Globus Bank, 1.40%; GTBank, 5.00%; Keystone 4.65%; Providus, 4.20%; Stanbic IBTC, 1.75%; SunTrust, 4.20%; UBA, 4.20%; and Union Bank, 4.95%.