Several Nigerian banks have increased their savings interest rates following recent changes to the Central Bank of Nigeria’s (CBN) monetary policy rate. According to updates sent to customers, commercial banks now offer savings rates between 7% and 8% annually, aiming to encourage deposits and financial savings. Wema Bank, for example, updated its rates to 7.95% per year for accounts including Savings Accounts, Salary Savings Accounts, and SMART Save Accounts.
While nominal interest rates are rising, many Nigerians remain skeptical about the benefits. If a customer saves N100,000 at 7.95%, they would earn around N7,950 before tax in a year. However, with inflation currently well above these returns, the real value of those savings continues to decline. Withdrawal limits imposed by banks further complicate earning potential for depositors.
Inflation remains a key concern for households. Data from the National Bureau of Statistics (NBS) shows headline inflation eased slightly to 15.06% in February 2026, but food prices surged 12.12% year-on-year, reversing previous declines. Experts note that rising costs of food, transportation, and energy continue to strain household budgets, making it difficult for many Nigerians to save or maintain their living standards.
Financial analysts and consumer advocates stress that higher savings rates alone will not shield Nigerians from the effects of inflation. David Adonri, Vice Chairman at Highcap Securities, explained that households face growing costs for essentials, limiting their ability to save. Similarly, Okezie, National Chairman of the Progressive Shareholders Association of Nigeria, emphasized that nominal gains from increased rates are offset by persistent price pressures across the economy.
CBN’s policy tightening aims to stabilize prices, but the impact on consumer savings is gradual. Improvements in purchasing power will depend on whether inflation slows and incomes grow in tandem with rising living costs. For now, while higher bank rates provide marginal nominal gains, Nigerians will continue to feel the pinch of inflation, highlighting the need for broader economic measures to support household wealth.
source: The sun