Interest rates - I need some help with understanding them!


#1

Have a look at the MCB's rates:

http://www.mcb.com.pk/includes/PLS%20DECLARED%20AND%20PROVISIONAL%20RATES.pdf

Scroll down to see the MCB Enhanced Saving Account and consider the second option. It offers a rate of 0.10% p.a.? i.e. ~100rs on 100,000 in a year?

Then, they have the MCB Smart Savings Account which offer a return of 5% p.a. which should be 5,000 of 100,000 in a year, or 1,250 in a quarter.

Why's there so much of a difference? What am I missing?

Sorry for my ignorance (if that's what you perceive it as), but although I do have some understanding of interest rates, I haven't ever dealt with banks in this aspect.


#2

you can avail the 0.1 % interest if your balance is below 20,000. you even get it if you have 1 rupee.

to get the 5% interest you must have at least 100,000


#3

[quote=", post:, topic:"]

you can avail the 0.1 % interest if your balance is below 20,000. you even get it if you have 1 rupee.

to get the 5% interest you must have at least 100,000

[/quote]

Yeah, I understand that. Actually, the 0.1% applies to >= 20,000rs. But that’s a lot of difference and a 0.1% p.a. is second to nothing. Who would save 100,000 just to get 0.1% p.a. - which is just 100rs.


#4

how? you would get 5 % when you 100000


#5

I think the MCB Enhanced Savings Account is more like a current account and less like a savings account. Which should explain the low interest rates.


#6

[quote=", post:, topic:"]

how? you would get 5 % when you 100000
[/quote]

Actually, I was wrong in my previous post. It’s 1% p.a. for saving over 20,000rs. 0.1% is for less than 20,000 and when there are more than 4 withdrawals.

1% p.a. is still too less for anyone to consider saving. (1,000 in 12 months off 100,000) MCB Smart saving and Enhanced saving are almost similar in all aspects. :confused:


#7

[quote=", post:, topic:"]

Actually, I was wrong in my previous post. It’s 1% p.a. for saving over 20,000rs. 0.1% is for less than 20,000 and when there are more than 4 withdrawals.

1% p.a. is still too less for anyone to consider saving. (1,000 in 12 months off 100,000) MCB Smart saving and Enhanced saving are almost similar in all aspects. :confused:

[/quote]

if the interest is so low then why bother and you wont get gunehgar too


#8

[quote=", post:, topic:"]

if the interest is so low then why bother and you wont get gunehgar too

[/quote]

It’s ridiculous to offer 1% p.a. I will personally go with Meezan bank’s Islamic banking where the expected rates are 3.x-5.x % … But let’s not consider the “Islamic” part - that’s not why I’m in favor of it, however, but it suit my needs. :)


#9

It's an old topic but I'm reviving it for the recent changes in the interest rates. Now the bare minimum set by state bank is 5% p.a. and that's what all the banks are offering as compared to 1% ( :lol: ) ..

Anyways, this has lead to Meezan bank to reduce their projected rates for Meezan Bachat Account. To offset the extra interest rate offered on their other saving accounts, they have reduced the rates on their higher yield account (MBA). Isn't that a bit weird?

Another one I was looking at is UBL's COD profit at 8.25% for 3 months certificate. How is the profit calculated (on maturity) for this certificate? Since it's a 3 month certificate but the 8.25% is probably p.a. Why do they need to make it complicated!


#10

HBL is offering the best rates atm i guess. 13% on a 5 year deposit plan


#11

If u really want to earn something safe on your saving, i ll suggest national saving scheme to you. So far they offer da best rates in pakistan. Ur investment are protected/guaranteed by gov of pak. They ve 6 different to cater for da diverse needs of customers. Interest rate varies from 10.5% to 13.56%. For more info visit their website.


#12

[quote=", post:, topic:"]

Ur investment are protected/guaranteed by gov of pak
[/quote]

now that’s a worry!


#13

Haahaaaaaha.


#14

what are defence saving certificates ?


#15

[quote=", post:, topic:"]

what are defence saving certificates ?
[/quote]

this are defai bachat certificates


#16

[quote=", post:, topic:"]

If u really want to earn something safe on your saving, i ll suggest national saving scheme to you. So far they offer da best rates in pakistan. Ur investment are protected/guaranteed by gov of pak. They ve 6 different to cater for da diverse needs of customers. Interest rate varies from 10.5% to 13.56%. For more info visit their website.
[/quote]

Yeah but they all have long tenures for maturity I think, like 3-10 years. I will look into the details though, thanks.


#17

[quote=", post:, topic:"]

If u really want to earn something safe on your saving, i ll suggest national saving scheme to you. So far they offer da best rates in pakistan. Ur investment are protected/guaranteed by gov of pak. They ve 6 different to cater for da diverse needs of customers. Interest rate varies from 10.5% to 13.56%. For more info visit their website.
[/quote]

Pak Rupee Devaluation rate

Fell against euro in last one year 27 Rupees.

Fell against Euro in last one year 11 Rupees.

Fell against Sterling in last one year 14 Rupees.

Considering the “bottom climb” rupee always follows 5% minimum is a joke. 10-14% “profit” well think about any investment in Pak Rupees devalue before you get the fruit out in profits.

Saving are thought over their value once your withdraw them.

Considering the Foreign Currency account.

Minimum requirement for UBL FC current account - 300$ or equivalent Sterling/Euro

Minimum requirement for MCB FC current account - 300$ or equivalent Sterling/Euro

Minimum requirement for Dubai Islamic Bank FC current account - 500$ or Equivalent

–Method of withdrawal offered on FC account = Check Book only

–Method of deposit offered on FC Account - Swift - FC in cash

–Charges on withdrawals on FC account - GOVT. TAX 5% + 0.6- 0.8%(bank tax)

Keeping in view the state of Rupee that is why FC accounts are popular. IF rupee devalues against FC more than 6 percent then ur savings in FC always remain strong.

Pakistan is an importing country with poor economy. Its currency always devalues as govt. is not bothered to keep the value stable. Any saving in Rupees account despite the 5-10% per annum profit actually devalues over time.


#18

#19

correction

Fell against US $ in last one year 11 Rupees.


#20

[quote=", post:, topic:"]

HBL is offering the best rates atm i guess. 13% on a 5 year deposit plan
[/quote]

Rupee’s value is plummeting on daily basis, so instead of getting ur money locked for 5 years for a mere 13%, it’d be much better if one could invest it in some promising property sorta business.

In 5 years, who knows, the Rupee’s value might be less then 50% of what it is now, so may be you’ll get 113 rs for the 100rs u deposit for 5 years, but by then the 113 rs would buy u things which have currently a value of 50rs or something …

i dunno business stuff but its some generic stuff i feel applies to savings in banks.

plus, dont ignore the Gunaah side, you’re gonna be questioned about everything related to Suud, in the afterlife.