Higher Rate

May 23, 2008 (LBO) – Sri Lanka’s Commercial Bank says it will pay 12 percent interest a year on a savings account, if it is opened with a minimum balance of 50,000 rupees. Other than maintaining a minimum balance of 50,000 rupees, the account, branded ‘Commercial Bank Super Saver’ has no restrictions on the number of withdrawals, an official said.

But inflation in the last 12-months has been over 25 percent in Sri Lanka.

“No standard savings scheme can beat the prevailing rate of inflation,” Commercial Bank managing director Amitha Gooneratne said in a statement.

“Nevertheless, the launch of this scheme is a significant step that will be welcomed by a large segment of the population that is not in the market for time deposits or government securities, but still needs a savings account with the highest possible return to meet day to day banking needs.”

The super saver accounts pay an annualised effective rate of 12.68 percent.

In Sri Lanka fixed-term deposits – where depositors agree to place money for 3-months and above – can get rates of around 17 percent and higher, but savings accounts from which money can be withdrawn without notice pay around