automated savings app - interest rate on savings deposit and savings interest rate on alat

Savings Interest rate on ALAT is goal, Here is why

Savings is any amount put aside from income, or pocket money, or gifts as the case may be while the savings interest rate is the rate interest is added to the amount put aside in simple terms. 

And we’ve all gone through this phase. First, you learn first-hand the wisdom in having savings, probably before you could even spell your name correctly. Then you become wiser, and move your stash of savings from your piggy bank, or from the smart purses of guardians, to a savings account. This is where most of us stop. But there remains one more, which is even wiser. And this is having your savings with ALAT where you can watch it grow, and that, at a rate of 10 percent!

In this post, we’ll provide an all-encompassing rundown of interest rates, including an explanation of why the interest rate on ALAT is the goal.

What is an interest rate?

Simply put, it is either the amount the financial institution pays you as a reward for saving with them or that you pay the financial institution for borrowing money. It is expressed in percentage and may be paid daily, monthly, or yearly (per annum).

You borrow money from banks when you take out a home mortgage. Other loans like payday loans or loans used for buying a car, an appliance, or paying for education.

Banks borrow money from you in the form of deposits, and interest is what they pay you for the use of the money deposited. They use the money from deposits to fund loans.

Banks charge borrowers a slightly higher interest rate than they pay depositors. The difference is their profit. Since banks compete with each other for both depositors and borrowers, interest rates remain within a narrow range of each other.

How Interest rate work

The bank applies the interest rate to the total unpaid portion of your loan, and you must pay at least the interest in each compounding period. If not, your outstanding debt will increase even though you are making payments.

Although interest rates are very competitive, they aren’t the same. A bank will charge higher interest rates if it thinks there’s a lower chance the debt will get repaid. For that reason, banks will tend to assign a higher interest rate to revolve some types of loans that are more expensive to manage. Banks also charge higher rates to people they consider risky; The higher your credit score, the lower the interest rate you will have to pay.

What’s a Fixed Vs Variable Interest Rates

Banks charge fixed interest rates or variable interest rates.

What are Fixed Interest Rates?

Fixed interest rates remain the same throughout the life of the loan. Initially, your payments consist mostly of interest payments. As time goes on, you pay a higher and higher percentage of the debt principal. Most conventional mortgages are fixed-rate loans.

What are Variable Interest Rates?

Variable rates change with the prime rate. When the rate rises, so will the payment on your loan. With these loans, you must pay attention to the prime rate, which is based on the fed funds rate (Federal funds are reserves held in a bank’s Federal Reserve account). With either type of loan, you can generally make an extra payment at any time toward the principal, helping you to pay the debt off sooner.

Types of Bank Account

There are different types of bank accounts, and they all attract different types of interest rates. The bank accounts are as follows;

  1. Savings Account
  2. Current Account
  3. Fixed Deposit Account
  4. Joint Account
  5. Corporate or Business Account
  6. Domiciliary Account
  7. Non-resident Nigerian Account

1. Savings Account

A savings account is the most common type of bank account in Nigeria and everywhere in the world, as it encourages low income earners to form or develop a saving habit.

Savings account is a type of bank account that is operated with a passbook rather than cheques. Owners or holders of savings accounts are paid interest for keeping their money with banks.

ALAT savings account grants you up to 10% interest rate, and offers zero account opening balance. The account is more or less a savings and withdrawals account, which makes some kinds of transactions impossible.

Summary Features of Savings Account:

  • Money can only be withdrawn occasionally if interest is to be paid
  • It attracts a favorable interest rate
  • Holders are issued passbooks (holders can also walk into their bank, request for payment slip and withdrawal from their account without any extra charge)
  • Withdrawals cannot be made by another person on behalf of the customer

Click here to open a savings account.

2. Current Account

This is simply an account on which cheques are drawn. A current account is usually operated by businessmen and organizations, and it is required if a customer wishes to make payment through cheques.

Here, a customer is free to withdraw money on demand as he will be given a cheque book. Holders of current accounts can obtain loans and overdrafts from the bank.

Summary Features of Current bank accounts:

  • Money can be withdrawn frequently
  • Holders of current accounts are not entitled to interest on savings.
  • Customers are entitled to the use of cheque book
  • Payment of commission is made by the customer to the bank
  • Other people can withdraw money from the account on behalf of the customer.

3. Fixed Deposit Account In Nigeria

Fixed deposit account is one of the major types of bank accounts in Nigeria and it is also called time account deposit.

Fixed deposit accounts are usually operated by individuals and organizations who have excess liquidity. It is one in which money is saved by the customer for a stated period such as a year, two year or more. So, withdrawals cannot be made anyhow.

This type of bank account grants the holders higher interest than a savings account, and customers can withdraw subject to notice.

A fixed bank account is opened majorly for a specific purpose and it can be renewed on maturity. This account also gives the customer access to a passbook.

Summary features of Fixed Deposit Account:

  • Money is deposited and saved in the account for a specified period of time as chosen by the customer. (Note: the minimum period is 30 days)
  • It attracts a higher interest rate
  • 7 days notice must be given before withdrawal.

4. Joint Bank Account

A joint account is also one of the popular types of bank accounts in Nigeria. It is an account opened with the name of two or more people who are all signatories to the account. It’s major couples that operate joint bank accounts.

From its name, two or more individuals in the eyes of the law, are regarded as the owner of the account. So, all parties to the account are signatories to the account.

Joint account are of two types in which one is majorly opened by couples;

  • Tenants-in-common – (opened by business partners)
  • Joint tenancy account (opened by couples)

5. Corporate or Business Account

What is a corporate bank account?

A corporate account is simply a business account, opened solely by companies or corporations (private or public limited liability companies), with a huge turnover, for business purposes.

Requirement of Corporate or Business Account

To open a corporate account in Nigeria, you will need the following documents:

  • Certificate of Incorporation
  • Tax Identification Number (TIN)
  • SCUML Certificate or Letter of Exemption
  • Valid IDs of Directors (photocopies)
  • Passport photo of each account signatory
  • Board Resolution

You’ll have to fill the corporate account form presented to you by your bank and must also present the documents listed above.

6. Domiciliary Account

A domiciliary account is a bank account opened in Nigeria which allows its user to make foreign transactions including receiving and transferring money in foriegn currency.

In other words, you can fund a DOM account with foreign currencies such as dollars, pounds or euros and enables you to do foreign transactions on that account.

You can send money to other countries with a domiciliary account and also receive money from other countries with it.

A savings domiciliary bank account is a foreign currency account that allows the person to save money in foreign currencies and be able to withdraw it using a bank teller.

A current domiciliary bank account on the other hand, is like a current account, and businesses or businesspersons normally use it.

7. Non-Resident Nigerian Account

Types of bank accounts in Nigeria – Non-Resident Nigerian Account.jpg

A Non-Resident Nigerian account is a bank account opened by Nigerians living outside Nigeria, who at the same time can enjoy the services of their home bank.

This premium service offers Nigerians in Diaspora the opportunity to open and operate a Nigerian bank account from anywhere in the world. 

Some of the services include Savings and Current accounts, Investment in Money Market instruments and eBanking services.

Why Should You Start Saving with ALAT and What is ALAT Savings Interest Rate?

Like we established at the beginning of this post, it’s wiser to keep your money where it would produce the best interest, and you get just that at ALAT Savings account: up to a whopping 10 percent savings interest rate.

First, you have to open a savings account on ALAT. Here’s how:

  • Download the ALAT app on your Android device, iOs device, or web.
  • Sign up with your phone number and a valid phone number
  • You’re good to go!
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