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Nigerians will receive higher returns on savings deposits as CBN raises interest rates

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The minimum interest rate on Naira savings deposits was increased from 0.15 percent to 4.2 percent by the Central Bank of Nigeria.

Beginning on August 1, 2022, the new directive came into force.

The rate has been changed from 10% to 30% of the Monetary Policy Rate, the bank stated in a circular dated August 15, 2022, and signed by Haruna Mustafa, director of the banking supervision department (MPR).

In an effort to combat inflation, the bank hiked the benchmark interest rate to 14% in July from 13%, marking the second time in a row that the central bank would do so in 2022.

“It will be recalled that as part of the efforts to ameliorate the impact of the Covid-19 pandemic, the Central Bank of Nigeria reduced the minimum interest rates payable on local currency savings deposits from 30% to 10% of the Monetary Policy Rate (MPR). This was aimed at stimulating growth in the larger economy following the economic-slowdown occasioned by the pandemic,” the CBN said.

“Following the return to full normalcy and considering the prevailing macroeconomic conditions, it has become necessary to effect an upward adjustment of the interest rate payable on local currency savings deposits.

“Accordingly, 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.”

With this new development, many Nigerians may now have to ditch various fintech firms that reward savings with better interest than the banks.

According to the latest deposit and lending rates in the banking industry published on the CBN website, eight out of 27 banks paid 1.40 per cent savings interest rates.

The banks are Access Bank, Citibank, Ecobank, Globus, Polaris, Stanbic IBTC, Sterling Bank, and Zenith Bank.

Others offered between 0.88 per cent to 4.20 per cent.

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