OMG! First Bank, Fidelity, other banks change interest rate for customers saving

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An interest rate of 8.18% on deposits is now offered to customers of 19 deposit money institutions
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

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

In accordance with a recent monetary policy change by the Central Bank of Nigeria (CBN), 19 deposit money banks are now providing their clients with an interest rate of 8.18 percent on their deposits.

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 percent in September 2024. Consequently, the interest rate of 8.18 percent is equivalent to 30 percent 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.

19 banks changed interest rates

According to the most recent data, 19 banks have changed their deposit interest rates to the required 8.18% as of November 1, 2024.

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.

What the rate hike means to customers

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 However, if customers withdraw more than four times in a month, the rate is no longer applicable.

Higher deposit rates provide savers with increased earnings, which can help their funds grow more significantly over time. An analyst highlighted that in an inflationary environment where the purchasing power of money declines, higher interest rates help to offset the effects of inflation, allowing savings to retain more of their value.

Since June 2006 when the MPR stood at 0.00, the CBN has steadily increased its MPR, reaching 27.25 percent 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 percent to 27.25 percent, a 50 basis point increase.

He also supported keeping the liquidity ratio at 30 percent, raising the cash reserve requirement (CRR) for merchant banks by 200 basis points to 16 percent, raising the CRR for DMBs by 500 basis points to 50 percent, and keeping the asymmetric corridor around the MPR at -100/+500 basis points.

Despite the recent slowdown in headline inflation and worries about restrictive monetary policies impeding economic recovery, Governor Cardoso contended that it would be premature to hold or lower the policy rate.

“In my judgment, while previous hikes have effectively altered the inflation trajectory, maintaining a tight stance is necessary to safeguard these gains against potential reversals,” he stated.