Above-market interest rates offered on three new savings products
Trustco Life is betting on substantially higher long-term interest rates with the launch this week of two fixed income savings products, each offering clients an 8.5% interest, compounded annually. A third savings product for short-term entry level savers, offers 3.5%, also compounded annually, with a data bundle as a sweetener.
It is unclear how Trustco will make up the difference between current local interest rates and its offered, contractually guaranteed rates. With Namibian prime at 7.75%, there is an 0.75% discrepancy between what banks are offering their best clients and what Trustco guarantees for long-term savers. However, prime is a lending rate and Trustco offers an income rate which may help make it feasible to offer rates above current market benchmarks.
These rates are offered in two savings products, Life Save and Elite Save. Both saving instruments are designed for individuals who want to build their wealth over a longer period of time. Both are underwritten by Trustco Life.
Head of Trustco Life, Annette Brand said: “We’ve spent months developing these tailor-made products that suit the needs of a variety of Namibian clients. The triple success in the detail of these products will ensure that all our clients can all score a hat trick in savings with the generous interest rates that they’ll earn.”
The third savings product, Start Save, is targetting the lower end of the market, with monthly savings ranging from N$250 to N$1000. In addition, data bundles between 2 gB and 8 gB per month are offered depending on the savings level chosen by the client. The offered interest rate is 3.5%, also compounded annually.
Trustco said, according to the 2017 Namibia Financial Inclusion Survey, a substantial portion of Namibian families (17.5%) still keep their savings in cash at home while one fifth of the population does not save at all. “[Their products] now offer the stepping stone Namibians need to allow them to accumulate wealth, ultimately to achieve financial independence.”