A survey conducted by “economy” on 25 banks showed that the National Bank of Egypt and Egypt topped the list of banks with the highest interest rates on savings certificates at 18%, which were offered by the two banks on Monday, March 21, in conjunction with the exceptional central bank’s decision to raise interest by 1% on the corridor.
The interest on deposit and lending recorded 9.25 and 10.25%, respectively, and the credit and discount rate rose by 100 basis points on the main operation to reach 9.75%.
The cost of funds did not enable the rest of the banks to enter competition with the government banks, to maintain the same interest levels with a large difference of more than 7% between them and the certificates of Al-Ahly and Egypt.
Eight banks came in second place in terms of the highest return on triple and quinquennial savings certificates, with an interest rate of 11% annually.
The Central Bank raised interest rates in an exceptional meeting to preserve the value of the Egyptian pound, after a “correction” movement on the currency rate, according to Tariq Amer, Governor of the Central Bank, caused the dollar to rise against the pound.
The last move in the central bank’s key interest rates was in November 2020, when they were reduced by 0.50%, bringing the total reductions over the past year to about 400 basis points.
Most of the banking sector banks have also been keen to provide variable-return savings certificates to automatically maintain the cost of their funds, given the linkage of pricing these certificates to interest on deposit and lending in the central bank “corridor”.
Banks currently provide a variable-return certificate between 7% and 8.5%, with a return that is paid quarterly.
The survey also showed that 3 banks acquired the third highest interest rate on triple savings certificates at an interest rate of 10.75%, paid monthly. These include The United Bank, Cairo, Construction and Housing Banks, while the National Bank of Kuwait pays the same interest rate, but quarterly.
4 banks occupied the third highest interest rate on triple savings certificates with a monthly return of 10.50%. The banks include Al-Ahly Qatar National, Construction and Housing, Egyptian Gulf and Arab African International.
Attijariwafa bank and National Kuwait followed with 10.25% on the triple certificates with a monthly return, and with a lower interest of 0.25%, the Egyptian Export Development Bank and the Emirates National Dubai Bank came.
Most banks offer various terms of savings certificates with various exchange periodicals to suit different customer segments. The terms of the remaining certificates range between 4 and 10 years, in addition to periodic or cumulative interest that varies from one bank to another.
Seven banks allow the purchase of savings certificates with a value starting from 500 pounds, namely, Credit Agricole, the United Bank, the Development and Housing Bank, the Agricultural Bank, the Egyptian Gulf Bank, the Suez Canal, Aouda, Egypt and Al-Ahly Qatar National Bank, most of which are for long-term certificates.
While the National Bank of Egypt, Egypt and Cairo, Al-Ahly National Qatar, Al-Aqari Al-Arabi, Al-Tijari International, Al-Tijari Wafa, Al-Kuwait National and Bloom allow the purchase of savings certificates at 1,000 pounds.
CIB and Alexandria banks set EGP 5,000 as a minimum subscription for bank certificates, while Emirates NBD set the highest minimum subscription for bank certificates at EGP 100,000.
Most banks allow their customers who have subscribed to savings certificates to borrow, guaranteeing their savings at rates ranging from 80 to 90%.
In light of the stability of interest rates at rates lower than in previous years, some banks have recently launched new savings products to maintain their customer base and provide various alternatives to customers, most notably the National Bank of Egypt, which launched a new product called “Fayda Plus Current Account” with daily interest, which is the first product of this type Linked to the “CONIA” index developed by the Central Bank.
It is based on the fact that the “Fayda Plus” account that the bank provides in pounds provides customers with an optimal method that ensures the ease of using their cash liquidity, in addition to obtaining daily interest and adding it monthly by determining the interest that is calculated through the index developed by the Central Bank “CONIA”.