More money for Nigerians as CBN asks banks to pay higher interest on savings

The Central Bank of Nigeria has raised the minimum interest rate on savings deposits in Naira from 0.15% to 4.2%.

The new directive came into effect on August 1, 2022.

The bank, in a circular dated August 15, 2022 and signed by Haruna Mustafa, director of the banking supervision department, said the rate had been revised from 10% to 30% of the monetary policy rate (MPR).

In a bid to fight inflation, the bank in July raised the benchmark interest rate from 13% to 14%, making it the second consecutive time the central bank would raise the benchmark rate in 2022.

“It should be recalled that as part of efforts to mitigate the impact of the COVID-19 pandemic, the Central Bank of Nigeria has reduced the minimum interest rates payable on local currency savings deposits by 30 % to 10% of the monetary policy rate (MPR). This was aimed at stimulating the growth of the economy as a whole following the economic downturn occasioned by the pandemic,” the CBN said.

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

“As a result, from 1 August 2022, the minimum negotiable interest rate on savings deposits in local currency will be 30% of the 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 companies that reward savings with better interest than banks.

According to the latest deposit and lending rates in the banking sector published on the CBN websiteeight out of 27 banks paid interest rates on savings of 1.40%.

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

Others offered between 0.88% and 4.20%.


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