Select Page

Above-market interest rates offered on three new savings products

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.”


 

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The newspaper started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at www.economist.com.na. His editorial focus is on economic analysis based on budget analysis, disecting strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored scores of journalism students as interns and as young professional journalists. He often assists economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to [email protected]