In a bid to support the savings culture in the country, the Commercial Bank of Rwanda (BCR) has launched a new savings account dubbed “Flexi Deposit” that will encourage customers with such accounts to earn impressive interest rates.
The move follows, government’s campaign that was launched last month to increase national savings. National savings have been consistently negative, varying in a range between-3 percent and 1 percent of the Gross Domestic Product (GDP).
While the account demands a minimum opening balance of Rwf250,000, customers are allowed to withdraw up to 50 percent of the deposit amount after period of six months in a year.
Addressing a press conference on Thursday, Sanjeev Anand, the Managing Director of BCR, noted that the launch of the product intends to cement the new face of the bank.
“We have been focusing on sorting out some internal issues and now that all those issues are resolved, we are coming back into the market with a wide range of new products,” Anand asserted.
Anand also observed that the product is intended to boost the country’s inadequate savings by offering a flexible account.
“The rate of savings is still very low – this product will encourage people to save. One of the reasons people do not save is because they have liabilities to cater for,” he said, pointing out that customers will be allowed to withdraw from the account and still earn interest in proportion to what has been saved.
The “Flexi Deposit” account is also intended to attract more deposits to the bank which have fallen to Rwf66.7 billion between October and November this year from Rwf80 billion mobilized last year.
Currently, BCR‘s lending rate is 14 percent. A one year fixed deposit account attracts an interest rate varying between 7.5 -8.5 percent depending on the amount invested.
“This product is in support of the government initiative to mobilise national savings. We are also trying to create alternative products such every customer finds what suits them best,” Faustin B. Rukundo, the Head of Retail and Marketing at the bank said.
The Economic Development and Poverty Reduction Strategy (EDPRS) has set a target of achieving a gross national savings of 18 percent of GDP to attain a gross national investment target of 30 percent of GDP.