Nigerians are expected to continue facing weak purchasing power despite commercial banks increasing savings interest rates following recent monetary policy adjustments, Daily Sun reports. Analysts warn that inflation still outstrips returns on deposits, limiting the benefit of higher savings rates for households.
Several deposit money banks (DMBs) recently updated their savings rates in response to changes in the Central Bank of Nigeria’s (CBN) benchmark policy rate. Some banks now offer rates of 7–8 per cent annually to encourage deposits and promote financial savings.
Wema Bank, for instance, informed customers that their savings accounts—including Tier 1–3 accounts, Open Wallet, Non-Individual Savings Accounts, Salary Savings Accounts, Purple Accounts, and SMART Save Accounts—now earn 7.95 per cent interest per year. WTA Individual and Non-Individual Accounts earn 3.975 per cent annually. Customers must maintain a positive balance and limit withdrawals to four per month to earn interest.
“This means that a customer saving N100,000 could earn roughly N7,950 in a year before tax, assuming the rate remains stable,” Wema Bank stated. However, exceeding the withdrawal limit may result in no interest payment for that month.
Despite these updates, bank customers remain unconvinced, noting that the increase is still well below the country’s inflation rate. According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation eased slightly to 15.06 per cent year-on-year in February 2026, down marginally from 15.10 per cent in January. However, month-on-month consumer prices rose 2.01 per cent, reversing a 2.88 per cent decline the previous month.
Food inflation, a major component of household spending, accelerated sharply. The food index rose 12.12 per cent year-on-year in February, up from 8.89 per cent in January, while monthly food prices surged 4.69 per cent, reflecting rising costs for essential goods.
David Adonri, Vice Chairman of Highcap Securities, said, “The rise in food prices is particularly significant for Nigerian households, where food expenses account for a large share of total spending. Higher costs for staples, transportation, and energy continue to strain disposable income, limiting the ability of households to save or spend.”
Okezie, National Chairman of the Progressive Shareholders Association of Nigeria, echoed the sentiment, noting that “with inflation still above average savings yields, depositors are effectively experiencing negative real returns. Even though nominal interest earnings are increasing slightly, the value of those earnings is reduced by higher prices across the economy.”
Recent CBN policy tightening aims to stabilize prices and manage inflation expectations. While higher policy rates usually increase lending and deposit rates, the effect on consumer savings is slower and less pronounced compared to borrowing costs.
Okezie added that improvements in real purchasing power will take time. “Nigeria has experienced several years of elevated price growth, meaning household budgets remain under pressure even if inflation begins to slow. Until then, higher savings rates alone are unlikely to fully offset the effects of persistent inflation on consumers,” he said.
