First Bank of Nigeria Plc and 18 other commercial banks have annouced an interest rate of 8.18% on deposits to customers’ deposits.
ROYAL NEWS gathered that this is after the CBN increased the minimum interest rate to 30% after the recent MPC meeting Banks offering 8.18% include Access Bank, Citi Bank, Ecobank, Fidelity, First Bank of Nigeria, Keystone Bank .
CBN’s Monetary Policy Committee (MPC) required all banks to make their lending rates publicly available.
UGC Commercial banks are required to offer a minimum interest rate of 30% of the Monetary Policy Rate (MPR) on consumer deposits.
To counteract growing inflation, BusinessDay reported that the CBN increased the MPR, also known as the benchmark interest rate, by 50 basis points to 27.25 per cent in September 2024.
Consequently, the interest rate of 8.18 per cent is equivalent to 30 per cent of this new MPR.
The CBN’s Monetary Policy Committee (MPC) required all Deposit Money Banks (DMBs) to make their lending rates publicly available in an effort to promote openness and educated financial decision-making.
The banks adhering to this rate include Access Bank, Citi Bank, Ecobank, Fidelity, First Bank of Nigeria, Keystone Bank, Optimus, Polaris, Premium Trust, Providus, and Signature Bank.
Others are Standard Chartered Bank, Sterling Bank, TitanTrust, United Bank for Africa (UBA), Union Bank, Unity Bank, Wema Bank, and Zenith Bank. However, five banks are providing rates that are lower than the norm.
CBN data shows that Globus Bank offers a 1.40 percent savings rate, FCMB offers a 1.15 percent rate, GTBank and SunTrust Bank pay an 8 percent rate, while Stanbic IBTC offers a 2.73 percent interest.
According to FSDH Merchant Bank’s Ayodele Akinwunmi, a relationship manager in corporate banking, the savings deposit rate is normally set at a minimum of 30% of the MPR.
However, if customers withdraw more than four times in a month, the rate is no longer applicable. Increased returns from higher deposit rates enable savers to see more substantial long-term growth in their funds.
Analysts pointed out that higher interest rates help counteract the effects of inflation, allowing savings to hold onto more of their value in an inflationary environment where money’s purchasing power decreases.
Since June 2006 when the MPR stood at 0.00, the CBN has steadily increased its MPR, reaching 27.25 per cent by September 2024. This trend was underscored during the 297th MPC meeting held on September 23–24, 2024.
The CBN governor, Olayemi Cardoso, voted during the meeting to increase the MPR from 26.75 per cent to 27.25 per cent, a 50 basis point increase.
