Features & Glossary of Savings Accounts / Current Accounts
Interest rate: The interest you earn for keeping money with a bank. It is published on annual basis, so 5% interest means annual interest rate of 5%
Interest payment frequency: The frequency at which the interest is credited in your account - could be daily, monthly, quarterly, semi-annual, or annual. Each bank decides its own frequency of interest payment.
Interest calculation: For a given period (fixed by each bank uniquely), banks could pay interest either on your average balance or the minimum balance during this period (say one month). Average balance is more beneficial for you, although most banks in Egypt pay you interest on minimum balance during a month.
Let’s look at an illustration:
o Imagine a bank pays 5% annual interest and there is no minimum balance requirement to earn the interest
o Now imagine an account status during a 30-day month: its balance is EGP 50,000 for 20 days, EGP 10,000 for 9 days and EGP 1,000 for one day
In case of average balance method, the above account would earn interest of EGP 151 (average balance of EGP 36,367 * 5% / 12)
In case of minimum balance method, the account would earn only EGP 4 (minimum balance of EGP 1,000 * 5% / 12)
· Tiered interest: Interest rates vary according to the size of the account balance. Most banks in Egypt offer tiered interest rate. If you keep higher balance, the percentage of return offered for a time period would be higher.
· Debit card could be issued for both savings account and current account
· Cheque book issued on a current account
· Fees: There are multiple types of a fee a bank could levying:
o Monthly maintenance fee: a fee most banks in Egypt levy irrespective of
your account balance
o Minimum balance fee: a fee most banks in Egypt levy if your account
balance falls below the minimum required
o Other fees could include debit card issuance & annual fee, cheque
book issuance fee, ATM use fee, fund transfer fee, etc.