Nigerian banks, including GTB, Zenith, and Access Bank, have raised interest rates on savings accounts following the Central Bank’s policy changes.
GTB, Zenith, and Access Bank Offer Better Returns on Savings Accounts
Nigerian Banking Sector Responds Positively to Central Bank’s Policy Changes
Nigerians woke up to a delightful surprise in July 2023.
Several banks, including major players like GTB, Zenith, and Access Bank, raised interest rates on savings accounts in response to the Central Bank of Nigeria’s (CBN) monetary policy adjustments that impact the national economy.
Let’s take a look at the Central Bank’s monetary policy adjustments.
The Central Bank increased the Money Policy Rate (MPR) by 25 basis points.
It marked the sixth increase in a row within a year, elevating it from the previous 18.50% to the new figure of 18.75%.
The CBN aimed at curbing the increasing inflation rates and promoting savings among Nigerians.
The Influence of the Money Policy Rate (MPR)
The MPR plays a pivotal role in defining interest rates in the financial ecosystem.
As a consequence of the CBN’s policy modifications, banks had to realign their minimum interest rates on savings account deposits to 30% of the MPR.
This policy overhaul replaced the earlier directive from September 2020 and took effect from August 2022.
The Banks’ Response to the New Policy
Various commercial banks, such as Standard Chartered Bank and Stanbic IBTC, have already updated their customers about the hike in savings account interest rates.
Standard Chartered Bank announced that they would now compute credit interests based on daily account balances, and to qualify for these interest payments, customers must limit withdrawals to a maximum of four times monthly.
Meanwhile, Stanbic IBTC updated its customers that it would adjust all product offerings related to the MPR in line with the new rate, effective from July 25, 2023.
Breaking New Ground: Record High Deposit Rate
The recent changes have led to an unprecedented deposit rate of 5.18% as of June 2023, according to CBN data.
This substantial hike reflects the influence of the increased MPR on interest rates across the banking industry.
Notable Banks Going Beyond the Average
Interestingly, several banks, including Access Bank, Citibank, Fidelity, Heritage, Polaris, Premium Trust, Sterling Bank, Titan Trust, Unity Bank, Wema Bank, and Standard Chartered Bank, offer an average interest rate on savings deposits that exceed the national average of 5.18%.
For example, Standard Chartered Bank offers a competitive 5.31% average deposit rate.
Coronation Bank stands at an impressive 6.78%, and Ecobank trails with 4.65%.
On the other hand, banks like FCMB, Globus Bank, Stanbic IBTC, and SunTrust offer relatively lower interest rates on savings deposits.
Making the Best of the New Interest Rates
However, these rate adjustments are still a positive development for customers keen on growing their savings with higher returns.
As the monetary environment continues to shift, customers need to stay updated with changes in interest rates and carefully select banking options that sync with their financial aspirations.
With the Nigerian banking sector undergoing continuous policy transformations, customers should explore various banks’ offerings to maximize their savings potential under the current interest rate regime.
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What led to the increase in savings account interest rates in Nigerian banks?
The Central Bank of Nigeria’s recent increase in the Money Policy Rate (MPR) led to a surge in savings account interest rates. Banks had to adjust their minimum rates to 30% of the MPR.
Which banks offer interest rates above the national average?
Banks such as Access Bank, Citibank, Fidelity, Heritage, Polaris, Premium Trust, Sterling Bank, Titan Trust, Unity Bank, Wema Bank, and Standard Chartered Bank offer interest rates above the national average.
How are credit interests calculated by Standard Chartered Bank?
Standard Chartered Bank now calculates credit interests based on daily account balances.
What is the average deposit rate offered by Standard Chartered Bank and Coronation Bank?
Standard Chartered Bank offers a 5.31% average deposit rate, while Coronation Bank stands at 6.78%.
What should customers do to maximize their savings under the new interest rates?
Customers should stay informed about changes in interest rates and carefully select banking options that align with their financial goals.