BANKING

Best high-yield savings accounts for Nigerians

Published

1 year ago

Best high-yield savings accounts for Nigerians

Nigeria’s economic situation is weighing on everyone. The prices of goods and services are consistently rising, while salaries remain the same. Even the funds left in “interest-yielding” savings accounts amount to nothing, as bank charges, inflation, and other issues eat them up.

Many Nigerians seek a secure and rewarding place to save their emergency funds or keep the money for a future project without the fear of inflation and bank charges halving them before their intended use. And this is where high-yield savings accounts come into play.

High-yield savings accounts allow you to grow your savings while enjoying competitive interest rates and convenient access to your funds. Therefore, if you’re looking for the best high-yield savings accounts available for Nigerians, this article has all the answers you need.

What is a High-Yield Savings Account?

A high-yield savings account is a bank account that offers higher interest on your savings than traditional savings accounts. These accounts’ annual percentage yield (APY) is usually three times higher than a standard savings account.

High-yield savings accounts are typically offered by digital banks, such as Mintyn, Kuda, Alat by Wema, etc., or financial institutions like Piggyvest and Cowrywise. However, some traditional brick-and-mortar banks also offer them.

One of the key benefits of a high-yield savings account is that you still have convenient access to your money while enjoying the high-interest rate peculiar to investment accounts.

How Does a High-Yield Savings Account Work?

A high-yield savings account compounds daily, allowing your savings to grow quickly. The interest, however, is only available for withdrawal at the end of every month. The APY determines how much interest you earn each year.

You must make a certain initial deposit to open a high-yield savings account. However, this depends on the financial institution, as most banks require an initial deposit of N10,000 and above. However, most digital banks and savings platforms offer high-yield savings accounts with no minimum deposit.

Because they’re mainly managed online, high-yield savings accounts often have little to no maintenance fees or transaction charges. And you can withdraw and transfer money out of your account up to a specified number of times per month without incurring any penalties.

Furthermore, just like traditional savings accounts, high-yield savings accounts from traditional and digital banks are secured by the NDIC.

A high-yield savings account is the best way to save funds you don’t have any immediate use for but might need at any time.

Top 5 High-Yield Savings Accounts – Traditional Banks

Here are the top five high-yield savings accounts from traditional banks in Nigeria:

1. Fidelity Bank High Yield Savings Account

Fidelity Bank offers high-yield savings accounts with a tiered interest rate based on a threshold. The maximum interest rate on the account is 7.3% P.A., which is available to accounts with a balance range of N5m to N50m.

You can open a Fidelity high-yield savings account with any amount but must have a minimum operating balance of N5,000 to avoid penalties. There’s also a maximum withdrawal limit of three withdrawals per month, which, when exceeded, comes with a forfeiture of the monthly accrued interest.

2. Stanbic IBTC Max Yield Savings Account

The Stanbic IBTC Max Yield Savings Account ranks among Nigeria’s top high-yield savings accounts for obvious reasons. It offers an interest rate of 10% of MPR per year for accounts with a balance of N100,000 and below or more than one withdrawal per month. However, there’s a bonus interest rate of 0.5% for accounts with a minimum daily balance of N100,000.

The Max Yield Savings Account’s interest is paid monthly to accounts with fewer than five monthly withdrawals. Furthermore, you need a minimum deposit of N10,000 to open an account with Stanbic IBTC Bank.

3. Access Bank HIDA Account

The Access Bank High-Interest Deposit Account is one of the best high-yield savings accounts designed to help you save for special projects or emergencies. Its tiered interest feature allows you to earn maximum interest on your savings, as your interest increases up to 7% P.A. as your savings balance increases.

The annual interest accrues daily but is payable monthly. However, you can only make four withdrawals in a month, as anything beyond that comes with the forfeiture of your accrued monthly interest. Furthermore, the HIDA account requires a minimum balance of N5,000 monthly. This is to avoid the penalty charge of N300 each time your balance goes below N5,000.

4. UBA Target Account

UBA also has one of the best high-yield savings accounts in Nigeria. The UBA Target Account is designed for people to save toward a project or set goal, such as children’s education, a wedding, building or buying a house, etc.

With a balance of N5 million to N100 million, you can get an APY of 6% (the maximum rate), which accrues daily and is paid into your account at the end of every month. However, with a savings balance of N50,000 to N100,000, you’re guaranteed an APY of 4.20%, which is still reasonable compared to the average savings account interest rate of 1.25%.

The account, however, requires you to have a minimum opening deposit of N50,000 and maintain a minimum operating balance of the same amount.

5. GTBank Target Savings Account

Guaranty Trust Bank offers one of Nigeria’s most competitive interest rates on high-yield savings accounts. The GTB Target Savings Account allows you to have your funds in an account that yields an APY of 4.95% annually, with an additional 1% if you maintain a standing order deposit for one year.

Unlike most high-yield savings accounts, the GT Target account’s interest accrues daily but is payable every six months. You’ll also forfeit any interest earned if you withdraw within those six months. Furthermore, there’s a minimum mandatory standing order of N500 on the GT Target Savings Account.

Top 4 High-Yield Savings Accounts – Online Banks

Here are the top five high-yield savings accounts from digital banks in Nigeria:

1. Kuda Bank Fixed Savings Account

Kuda Bank offers you up to 15% annual interest on fixed savings. The bank introduced the “spend and save” plan to help you save as much money as possible within a fixed period. Every time you pay for something with your Kuda bank, a certain percentage of money is withdrawn and put into your savings account, which accrues annually. You’ll, however, forfeit your interest anytime you withdraw from the savings account before the one-year maturity period.

2. Alat by Wema Bank

You can earn up to 8.75% on interest annually if you save your money with Alat by Wema. The Alat Savings Account helps you easily achieve your savings goals, as your interest accrues daily and is available monthly. Like most online banks, there’s no minimum deposit to open an Alat by Wema Savings Account.

3. Piggyvest

Piggyvest is one of the most secure online savings platforms in Nigeria. You can earn interest up to 8% P.A. on your PiggyFlex account. However, this is subject to a minimum of four monthly withdrawals. You’ll forfeit your interest for any month you make more than four withdrawals.

4. Cowrywise

Cowrywise is another wonderful online savings platform available to Nigerians. The interest you earn on your Cowrywise savings depends mainly on how long you save. Here’s a breakdown of how much interest you can earn on your Cowrywise savings:

3 months – 5.50% P.A
6 months – 6.50% P.A
9 months – 7.50% P.A
Above 1 year – 8.50% P.A

Conclusion

To build wealth, you must exhibit a certain level of financial discipline, which begins with saving. A high-yield savings account gives you the advantage of earning high interest on your savings while still having access to them. With the best high-yield savings accounts for Nigerians listed in this article, choosing the right place to save your funds becomes easier.

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Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, commenting on the transaction, said: “We are pleased to have supported Ecobank Transnational Incorporated (“ETI”) in placing the first public Eurobond issuance by any Sub-Saharan African financial institution since 2021, following our bridge financing support earlier in the year. This transaction underscores Afreximbank’s capacity and readiness to structure innovative market access solutions for our pan-African banking partners.”

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Distributed by APO Group on behalf of Afreximbank.

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International Islamic Trade Finance Corporation (ITFC) and the Central Bank of Nigeria Successfully

These workshops form part of ITFC’s Integrated Trade Solutions (ITS) framework, aligning with the organization’s goal of providing holistic trade financing interventions in OIC member countries.

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International Islamic Trade Finance Corporation (ITFC) and the Central Bank of Nigeria Successfully

Nigeria’s Islamic finance industry, valued at US$3.8 billion, is one of the major Shariah compliant industries in Africa. Despite some challenges such as low public awareness and a smaller capital base compared to conventional banks, Islamic finance has been substantially contributing to reduce financial exclusion and improve access to affordable finance in the country. The three-day workshop was designed to bridge prevailing knowledge gaps focusing on key areas such as Sukuk issuance and main non-interest banking products basics.

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Distributed by APO Group on behalf of International Islamic Trade Finance Corporation (ITFC).

About the International Islamic Trade and Finance Corporation (ITFC):

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Kazang Pay launches card acquiring service in Zambia

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Distributed by APO Group on behalf of Kazang.

ABOUT KAZANG:
Kazang (www.Kazang.com) is a leading provider of cash and digital solutions to merchants in Southern Africa’s informal economies. Our fintech solutions include a diverse range of value-added services (VAS), card acquiring, secure cash vaults and supplier payments platforms. Operating with a network of approximately 90,000 active devices, we process approximately 2.2 million transactions daily in markets such as South Africa, Namibia, Botswana, and Zambia.

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Lesaka has a primary listing on NASDAQ (NasdaqGS: LSAK) and a secondary listing on the Johannesburg Stock Exchange (JSE: LSK). Visit www.LesakaTech.com for additional information about Lesaka Technologies (Lesaka ™). $LSK / $LSAK