Does your bank pay interest on your savings account? Mine doesn't.

A lot is wrong with our traditional banking system. They are no doubt important in the smooth running of any economy. While for the present we may not completely do without them, I strongly believe they can improve in many aspects of their services. One of them is - paying interest for money kept for a long time in a savings account. Many of the banks in my area do not pay interest and that is wrong.

I have accounts with two reputable banks in my country

I live in Nigeria. In my country, there are many private banks and banks owned by the government. I will be fair enough not to mention names here, but the two banks I operate with are some of the 'best' private banks in NIgeria. However, I cant remember the last time I received interest for the money I save in my accounts.

I believe that by design, a savings account is meant to be paid some interest over a period of time. The money we keep in those accounts for many months are used by the bank for various businesses such as loans and investments. So I really wonder why it is such a difficult thing to pay interest on savings accounts. Like I said, I have two active accounts in two different banks. The story has just been the same. At the end of the month, no interest is paid.

Charges and deductions instead of interest

Our savings accounts are supposed to receive interest. Not paying the interest is bad enough. But there is something worse. The charges by some of these banks can make you cry. Every transaction attracts some charges and deductions from your account. Interestingly, the charges come even if the bank is experiencing network problems. Let me share with you.

As you can see above, from that NGN80,000 transfer, there was NGN50 transfer charge, another NGN3.75 VAT. Then I also got debited NGN100 stamp duty charge. All on one transaction. So you can fully understand what we are having to deal with on daily basis. But That's not all. There is more.

Do you know that some of these banks even charge you for deposits. I had an experience not too long ago where someone paid me NGN40,000 and I was credited NGN39,950. It was like crazy. I was not owing anything. Just like that NGN50 was deducted for receiving money. It was not funny at all, but that is the type of system we have found ourselves in.

I believe this is not an isolated experience. You probably have your own stories to tell. Through this post, i want to know if your own bank is doing better, or just the same story. Mine does not pay interest. Instead, I am charged for almost everything - sometimes including for deposits.

My effective alternative for now

For now it is nearly impossible not to deal with banking each day. Crypto is yet to fully replace our traditional banking. So I have switched to one of the modern, fully online banks that have become popular in Nigeria. These modern online banks are out to cure the ills of traditional banking. I can say that in many respects, they are doing that well.

This particular one that i run a savings account with actually pays interest everyday on savings. Exactly 11.59pm each day, the interest is paid and is compounded on the savings. They pay 10% per annum of your savings. Its flexible too, meaning that you are free to withdraw or spend your savings anytime. Let me share with a screenshot so you can see me daily interest on savings.

Conclusion

I hope that our traditional banking system will be improved upon. Its really a sad situation. The regulators have a role to play here, to ensure consumer protection against unethical practices that are too common in our banks. For now, i will be using the online banks for savings and other major transactions. And hope the other banks improve soon.

Share with me your own experience saving with your bank and transactions as whole in the comment section