Depositors To Earn Less Interest From Banks After Deposit Floor Scrap

The effects of the Finance Act 2018 are being felt across board, and now depositors will have to feel the pinch as the banks will have now to cut interest earned on deposits following the deposit floor scrap.

The Act scrapped the floor that mandated lenders to pay at least 70 percent of Central Bank of Kenya (CBK) signal rate.

Already, several Financial institutions have signaled that they will cut interests earned on deposits.

For instance, the National Bank of Kenya (NBK) has introduced a tiered rate that will see only customers with more than Ksh2 million earn interest above the now scrapped minimum 6.3 per cent.

the Kenya Commercial Bank (KCB) has issued a notice that as from November 16, depositors will earn an interest of seven percent per annum on KCB goal savings account, down from 8.5 percent that it has been offering since launching the account in June last year.

Depositors will earn less than 6.3 per cent interest from other savings accounts.

Equity Bank has also hinted that it will reduce interest rates earned by its depositors.

Read: Nakumatt Announces Closure Of Nakumatt Mega, For Good

The proposal to scrap the deposit floor was arrived at by the National Assembly’s Finance Committee in the controversial Finance Bill 2018, that was passed amidst chaos in parliament and later assented into law by President Uhuru Kenyatta.

“Having discussed for a long time, we have proposed that we retain the status quo but we remove the lower cap so that the banks and the customer are left to discuss about interest rate to be given on the savings,” committee chairman Joseph Limo told MPs when he tabled the report in the House.

Do you have a story you want told? Do you know of a sensitive story you would like us to get our hands on? Email your news TIPS to  Also WhatsApp 0708677607 with your news tips

Written by Francis Muli

Follow me on Twitter @francismuli_. Email

One Comment

Leave a Reply

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

ice hockey

Kenya’s Sole Ice Hockey Team, Kenya Ice Lions, Gets Treat Of Their Lives In Canada

Liquid Telcom Going To The Drain Due To Cartel Management, Insiders Reveal