Business owners have been quoted as saying interest rates are being raised to woo new customers.
Some banks have raised the rates on both savings accounts and fixed-deposits while some have only done so for savings.
The savings interest rate, which now stands at 8% per annum, will be raised to 8.25%, which translates to interests of 8250 Kyats on 100,000 Kyats in savings, as compared to 8,000 Kyats previously.
The same logic applies to the interest rate for one month fixed deposits, now 9% instead of the previous 8%, earning 9,000 Kyats—as per 8,000 previously—per month for every 100,000 Kyats deposited.
The interest rates for the following types of deposits will be increased as well: 3 months fixed deposits from 8.5% to 9.25%, 6 months fixed deposits from 9% to 9.5%, and 9 months fixed deposits from 9.5% to 9.75%.
The only exception is for 1 year (12 months) fixed deposits for which the rates will remain at 10%.
"Our main reason for the raised rates is for the good of our loyal customers and to make life easier for pensioners since commodity prices are always on the rise", said Daw Khin Chaw Su, Managing Director of Kanbawza Bank.
As of now, CB Bank, KBZ Bank and Asia Green Development Bank are offering these raised rates.
“We have to do the same thing as others are doing since we want our customers to get the same benefits as those of other banks. We don't want them to switch to others banks which are offering more attractive services,” said a responsible person from AGD Bank.
According to a CB Bank official, their bank—which started the current trend—Is already offering 8.25% interest on savings from the previous rate of 8% but is still deliberating whether to raise the interests on fixed deposits.
It is expected that other private banks will soon be offering comparable interest rates to remain competitive.