Jamaica’s Consumer Affairs Commission (CAC) recently completed a survey which confirmed that savers are earning very little interest on their deposits.
The survey focused on three banks – NCB, BNS and First Caribbean and the information involves interest on savings, withdrawal fees, dormant fees and fees paid for not keeping a minimum balance.
NCB
At NCB, to start earning any money on your savings, you will have to be saving at least $50,000. Below that amount the bank does not pay interest on customer savings. But between $50,000 and $199,999, it pays only 0.15% interest per year. That means someone saving $199,999 at NCB will earn under $300 per year on that money.
If you save between $200,000 and $249,999 at NCB, you will earn 0.3% in interest. At that rate a person who saves the top end – $249,999 – earns under $750 per year in interest.
You could earn more by saving more, but not much more interest. NCB pays 0.5% to customers who have between $250,000 and $499,999 in a savings account, while $500,000 to $999,999 attracts interest of 0.6%.
One-point-five per cent is paid on savings of $1m to $4, 999,999.That means if you save one dollar less than $5m with NCB, you will receive just under $75,000 per year on that money. NCB pays 1.75 per cent on savings of over $5M.
BNS
at BNS, the interest earned on savings come in lower at all levels, although the bank pays interest on a lower balance than NCB – that’s above $5,000.
If you save $5,000 to $199,999 at BNS, that bank pays you interest of 0.1% or about $199.99. Between $200,000 and $499,999, interest is paid at 0.35%, which means a dollar less than $500,000 will earn the saver less than $1,750 each year.
For all other amounts saved at BNS, the bank pays only 0.5% interest. That means that if you save $5m at BNS, you will earn $25,000 per year on that money, which is much less than the $87,500 you would earn on the same savings at NCB.
First Caribbean
At First Caribbean, interest is paid on savings of as little as $2,000. It pays more interest on each level of savings than BNS and NCB. For example, while NCB and BNS pay 0.15% and 0.10% on savings of $50,000, First Caribbean pays 0.25% on that amount.
Those interest payments mean that, at NCB, on $50,000, the consumer would earn $75 per year, while at BNS the earning is $75 and at First Caribbean it is $125. And while NCB and BNS pay 1.75% and 0.5% on $10 m, First Caribbean pays 4% interest on that money.
That means, on $10m, a NCB customer would earn $175,000, a BNS customer would earn $50,000 and a First Caribbean customer would earn $400,000.
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Interest rate blues
