Payable KCB rates on deposits have been reduced. This follows the move by the bank to cut interest rates payable on savings accounts.
On Tuesday KCB announced through a public notice that it will now pay 7 per cent per annum on the KCB goal savings account. This will be down from the 8.5 percent rate that the bank has been offering since it launched the account in June last year.
“We would like to inform all our esteemed customers that effective November 16 and in line with the Finance Act 2018, the interest rates paid on your savings accounts will be as follows,” the bank announced.
Other KCB rates on savings accounts will also pay customers less than 6.3 per cent interest.
The decision to slash rates comes after the Finance Act 2018 scrapped the floor that mandated lenders to pay at least 70 percent of Central Bank of Kenya (CBK) signal rate.
Incidwntally, the move comes a day after National Bank of Kenya (NBK). NBK introduced a tiered rate that will see only customers with more than Sh. 2 million earn interest above the now scrapped minimum 6.3 per cent, signalling that customers may earn less on their deposits in the new regime.
CBK data shows that last year commercial banks’ interest expense dropped by Sh. 7 billion despite customer deposits growing by Sh. 300 billion to Sh. 2.9 trillion. This poured cold water on the expectation that amended banking laws could earn customers higher interests on deposits.
