The Central Bank of Nigeria (CBN) has reviewed the minimum interest rate on savings deposits in banks to at least 1.25 per cent per annum.
However, with the inflation rate at 12.8%, it is still at .05% loss on deposits per annum.
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The CBN conveyed the decision to all banks in a circular titled Re-Interest Rates on Savings Deposit dated August 31, 2020, and signed by Bello Hassan, Director of Banking Supervision.
Thus going forward, interest rates shall be negotiable subject to a minimum of 10% per annum of Monetary Policy Rate, effective September 1, 2020. Previously, banks pay less than 5% annual interest on savings deposits. CBN websites put the rate at about 3%.
The circular said: “The CBN has noted with satisfaction the recent declining trend in market rates in the banking sector following the implantation of policies aimed among others, at stimulating credit low to the real sector.”
“Consequently, all deposit money banks are hereby informed that effective September 1, 2020 interest on local currency savings deposits shall be negotiable subject to a minimum of 10% per annum of Monetary Policy Rate,” it stated.
The Monetary Policy Rate is currently 12.5%.
Savings deposit rates are default rates banks pay customers for keeping their money in the banks.
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