01:48 PM
Friday 25 March 2022
I wrote – Manal Al-Masry:
The phenomenon of breaking certificates in banks owned by customers, to buy with a high interest rate of 18%, has become widespread among all banks’ customers, as the new certificate in Al-Ahly and Egypt banks offers the highest return in the banking sector at present.
The certificate is broken after 6 months of purchasing it from any bank, but the penalty rate imposed on certificates in banks that cannot compete with the certificate of Al-Ahly and Egypt banks is very low, which makes it easy for the customer to break it easily, and withdraw part of his savings in any bank in favor of the certificate of 18%.
Branch managers of a number of banks explained that there is an increasing number of customers daily requesting to withdraw their deposits or break certificates to repurchase a high-return 18% certificate in Al-Ahly and Egypt banks for fear of stopping it.
Last Monday, Al-Ahly and Egypt Banks decided to offer a new high-interest savings certificate, starting from last Monday, after the Central Bank announced an increase in the interest rate by 1% for the first time in 5 years, and the depreciation of the pound against the dollar.
Banks impose a fine on the customer for breaking the certificates before their expiry date out of the total return he obtained. The percentage of the fine varies according to the period of linking the certificate.
Masrawy presents the percentage of the fine imposed for breaking certificates in the Cairo and Alexandria banks, which is low, making it easy to break.
Cairo Bank:
The triple certificate with a fixed return known as “Primo” whose return does not exceed between 10.25% monthly return or 10.5% quarterly return is the most frequently traded among clients and is witnessing break requests.
The percentage of the client’s loss from the accrued return (and not from the certificate’s origin) during the period of linking it due to the breakage of the certificate before its expiry date depends on the period of linking it and ranges between:
During the first year of linking the certificate: only 5% of the total return obtained, not the original, is deducted.
During the second year: 4.75% of the total return obtained by the customer during the period of linking the certificate will be deducted, not from the original.
During the third year: 4.5% of the total return obtained by the customer during this period will be deducted.
Bank of Alexandria:
The certificate with the highest return, currently in the bank, pays a return ranging between 10% annually for the monthly return and 10.25% annually for the quarterly return, and it is one of the certificates that is broken after deducting a percentage from the customer from the total return he obtained and not from the certificate’s origin.
The percentage of the fine, which is very low for the customer for breaking the certificate before its expiry date, ranges between:
During the first year: a deduction of 3% of the total return obtained during the period of linking the certificate, and not from the original certificate.
During the second year: 2% of the total return obtained by the client during the period of linking the certificate, not from the original.
-During the third year: 1% of the total return obtained by the client during the period of linking the certificate, not from the original.