Win for depositors as CBN increases interest on savings deposit to 4.2% from 1.4%

The Central Bank of Nigeria (CBN) has ordered banks in Nigeria to pay savings deposit accounts an interest rate of at least 4.2 per cent, an increase from the 1.4 per cent previously received.
This was contained in a circular seen by Nairametrics, dated August 15, 2022, titled “Review Of Interest Rate On Savings Deposits” and signed by Haruna B. Mustafa, Director Of Banking Supervision.
According to the apex bank, the hike in savings interest rates, which is effective from August 1, was made in light of the return to complete normalcy after taking into account the current macroeconomic conditions.
The circular reads “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 per cent to 10 per cent 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 apex bank noted that Nigeria has returned to economic normalcy, the bank 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 per cent of MPR. This supersedes our letter dated BSD/DIR/GEN/LAB/13/052 on the subject. September 1, 2020,” the CBN said.

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