Here is why your idle funds shouldn’t be in a savings deposit!!!

The Central Bank of Nigeria a few weeks back concluded its monetary policy committee meeting increasing the rate at which the Central Bank lends money to commercial bank from 12% to 14%. That was the highest jump in history.

The effect of such price increases is that the lending rates equally move in the same direction ensuring that what lenders pay for their loans rises in tandem. Commercial lending rates have been in the northwards of 24% since then we started experiencing the drop in the price of crude oil.

With the MPR now increased, analysts also expect to see a movement in the rate at which the government pays when it borrows money from the public. It does this via Treasury Bills or Bond Issuance.

One rate which hardly follows policy rate changes are your savings deposit rates. Thus , despite an increase in MPR and mending rates, deposit rates have remain stubbornly low. This is even more shocking when you consider that the inflation rate is currently at about 16.5%.

What this means?

This basically means that idle funds kept in your savings bank account at an interest rate of about 3-3.5% is a waste of your money. You are probably better off depositing that money in fixed deposits.

Join our BBM channel for instant updates : C0030863D

Comments

Emefiele gives insight, on what to Expect during his second term

The newly re-appointed Governor of the Central Bank of Nigeria, Godwin Emefiele, over the weekend enumerated the things intends to accomplish during his second term in office. Emefiele enumerated his plans while speaking to journalists at the University of Nigeria Nsukka (UNN), on the sidelines of the institution’s Special Convocation which took place on Friday. The CBN Governor gave delivered a lecture at the event. Driving down inflation: According to Emefiele, he intends to focus on policies that would drive down the country’s inflation rate, improve price stability, and drive economic growth. Emefiele’s Stern Warning: The CBN Governor further disclosed that he plans to work with his team to drive down imports and encourage exports. He also used the occasion to issue a stern warning to those who meddle with policies aimed at achieving economic stability, telling them that they will be caught and punished by law. Mr Emefiele’s second term plans came just a few days after ...

Alert: Naira Gains A Massive 5% Against the Dollar

The exchange rate rebounded on Friday to close at N308 at the official interbank market. The local currency gained about 5.2% reversing the N325 it closed with on Thursday. According to reports, the gains was mostly due to a sale of forex by the Central Bank of Nigeria providing enough liquidity to meet the demand currently in the market. The naira has closed at an all time low of N364 to the dollar on Thursday following a surge in demand. The central bank has been selling dollars almost daily to boost liquidity and support the naira. Join our BBM channel for instant updates : C0030863D

Gas Alone Cannot Achieve increase in Power Sector – Fashola

The Minister of Power, Works and Housing, Babatunde Fashola , on Thursday said in Lagos that gas alone could not bring the much needed increase in power supply in the country. Fashola spoke as guest speaker through Chinedu Ugbo , acting Chairman, Niger Delta Power Holding Company (NDPHC), at the 2016 Annual Conference of the National Association of Energy Correspondents in Lagos. The News Agency of Nigeria (NAN) reports that the theme of the conference is entitled: “Low oil price: Impact and the way forward” . Fashola said, “It is not gas alone that will allow us to achieve incremental power”. “It is our most reliable source of power, yes, but it is only one solution among many other underutilised solutions. Mambila Power Station, for example, is likely to be our most defining in the road to incremental power, situated in Taraba State. It will potentially add 3,000MW to the grid and yet this is a hydro-electric project, not gas. Our ministry has recently publicis...

The Finance Dude

Search This Blog