• Lobby

  • Bank savings account interest rates

Xsever wrote
Yeah, that's true. I am not sure about the public holidays being included or not but Fransabank charges 7,500 at the end of maturity so with monthly maturity, one ends up paying 12x that amount which eats from the nominal rate. The rest is taxes which is 7% now of the nominal gain.

I would appreciate if you can share the fees BoB charges for such an account. Another bank with lucrative returns is BLF. They always call offering great rates but for 6 months+ maturities.
My bank charges 6,500 per month and regarding the discrepancy between you and me:
In similar months (30 or 31), do you get same return percentage on maturity date? If not then the public holidays issue or such must be true because mine have similar returns in same months.
Guitaret wrote My bank charges 6,500 per month and regarding the discrepancy between you and me:
In similar months (30 or 31), do you get same return percentage on maturity date? If not then the public holidays issue or such must be true because mine have similar returns in same months.
When I changed the bank fees from 7,500 to 6,500 in my Excel investment simulator, the real return rose to 5.64% so that matches with yours. There's a slight difference in the amount saved as well between you and me, but yeah we're in the same boat.

I can't know accurately regarding 30 vs 31 because I always add money to the account sometime during the month so the percentage is always all over the place since the invested amount changes within the investment period (month).

To be honest, when I tell my friends in the US and Canada about the rates we get here, they're wowed and they ask me if they can send me money in USD so that I exchange it into LBP and invest it for them. I know the Lira is pegged and I know it carries some risk, but I still consider this investment to be low risk and for 5-6% return, it beats US bonds and eats it for breakfast. We're blessed by that when it comes to investments, but pay the price should we need a loan.

I recommend you read 1)The Millionaire Next Door and 2)Common Sense on Mutual Funds. These are the most important books I have read about personal finances and investment. The second book basically proves that trying to beat the market ends up failing most of the time. You're better off just investing in a low-cost index fund that tracks the entire US stock market.
To be honest, when I tell my friends in the US and Canada about the rates we get here, they're wowed and they ask me if they can send me money in USD so that I exchange it into LBP and invest it for them. I know the Lira is pegged and I know it carries some risk, but I still consider this investment to be low risk and for 5-6% return, it beats US bonds and eats it for breakfast. We're blessed by that when it comes to investments, but pay the price should we need a loan.
If you live in Lebanon, you should not forget to adjust for inflation. In 2017, the inflation rate was around 4.5% so you did a real return of 0.5-1.5%. Naturally, this wouldn't apply to you if you're living abroad.
samer wroteIf you live in Lebanon, you should not forget to adjust for inflation. In 2017, the inflation rate was around 4.5% so you did a real return of 0.5-1.5%. Naturally, this wouldn't apply to you if you're living abroad.
Yes, that's true. Inflation does eat away from the gain achieved. I'm interested in the source of your data. Can you please share it?

I use the brite-blominvest site for all data related to Lebanon. Very information-rich.

https://brite.blominvestbank.com/series/Consumer-Price-Index-National-2908/
nefe_lpmk wrote
Mhdskr wroteI read about a insane offer by BOB a while back. the conditions are aggressive but one can reach up to 9.65% on LBP deposits. those interested can google "SMACC" account at BOB (https://www.bankofbeirut.com/en/Personal/accounts/105/smacc)
Can you give more details?
All I know is what's given in the link I provided earlier. Haven't went to a BOB branch and asked in person. I'm more inclined to go for a retirement plan with Metlife instead. It's a better option IMO. 7.1% interest guaranteed on USD + life insurance.
12 days later
Guitaret wroteJust an update guys, judging by the publications of BDL online, the interest did officially go up.

Please check the below link:
http://www.bdl.gov.lb/webroot/statistics/table.php?name=t5272-6

Private banks usually offer more than that, so @Xsever we should negotiate a better deal.
Thank you for the update and the link. I will definitely print a screenshot and take it with me to the bank as I'll meet with the branch manager. She always handles the interest rate on my savings account.

You probably know that we can't get near the 6.91% with a monthly maturity and with mid-range amounts, but any basis point increase we can get would definitely be welcomed.

Let's keep each other posted.
4 days later
The important thing is to get monthly compounding. Roughly speaking, a 5% per annum rate, when compounded monthly, will translate to around a ±5.6% effective rate. Also, I'd highly encourage leaving your sums in LBP. The rate is higher because of the higher risk, but practically speaking BDL has enormous amounts of USD and gold, so if there's a crisis on the LBP, it wont happen overnight. You'll have more than enough time to sell them and buy dollars. If you have a decent amount of money, you can get 8 to 8.5% on LBP compounded monthly which is pretty amazing for a basically/practically risk-free investment.
@Salloum your points are understood and appreciated.
Salloum wrote If you have a decent amount of money, you can get 8 to 8.5% on LBP compounded monthly which is pretty amazing for a basically/practically risk-free investment.
Please share if you have information about banks that offer this much.
Nobody in this thread is accounting for inflation and taxes. It would be interesting to see the exercise being done. Sadly I don't have the data for inflation
silo_m8 wroteNobody in this thread is accounting for inflation and taxes. It would be interesting to see the exercise being done. Sadly I don't have the data for inflation
It has been mentionned in this thread but to be honest it is not a big concern of mine because this investment is not a long term one for me. A better way to help you see it: Consider it a piggy bank for a young working man in Lebanon that will give him interest, plus a restraint & a discipline plan against overspending on stuff you don't really need, stuff that will help keeping you poor like the average millennial.
Guitaret wrote@Salloum your points are understood and appreciated.
Salloum wrote If you have a decent amount of money, you can get 8 to 8.5% on LBP compounded monthly which is pretty amazing for a basically/practically risk-free investment.
Please share if you have information about banks that offer this much.
I work at a top 3 bank (Audi, BLOM, Byblos) and we are able to offer this rate, usually for $250k+ deposits.
silo_m8 wroteNobody in this thread is accounting for inflation and taxes. It would be interesting to see the exercise being done. Sadly I don't have the data for inflation
I did mention the taxes in a previous post for sure. My current nominal rate is 6.2% per year, but when I factor the 7% tax and the bank's $5 annuity fee (monthly for me), the real rate drops to 5.63%. Samer mentioned that inflation was 4.5% last year so that leaves you with 1.13% which is sad but still safe.

On the other hand, inflation will not always be 4.5%. This is just an outlier.

For access to a ton of data, check this out and thank me later.

https://brite.blominvestbank.com/
Guitaret wrote Consider it a piggy bank for a young working man in Lebanon that will give him interest, plus a restraint & a discipline plan against overspending on stuff you don't really need, stuff that will help keeping you poor like the average millennial.
Very very well said! That's something I really learned by living abroad and reading a lot of books on investing. One must always live below their means so that they can save and invest throughout their working life. By the time it's retirement time, one must have easily collected ~1M or an equivalent amount for them to retire comfortably. When you reached retirement age, you start shifting your investments from riskier to safe (stocks to bonds).

The books I recommend are: 1)The Millionaire Next Door and 2) Common Sense on Mutual Funds.

Sadly in Lebanon, people want to live way above their means while having non-matching salaries and this results in loans piling up: car loan, personal loan, wedding loan, plastic surgery loan, phone loan, etc....
8 months later
Hi guys, revving this thread.
And after reading quite a few posts, I'd like to ask for some guidance and suggestions.

My work place, which is in private sector, has recently given us the choice of fixing our salaries with 2 banks,
Fransabank or Bank or Beirut.
First thing to note is, that after talking with the representatives of both banks, that they are excluding any sort of fees for us, including account fees, income tax, debit/internet card fees, free credit card (but of course they will take interest If I use it).
So basically, there are no fees for using their services I guess, and these are with both banks.

But I would like to ask for your opinions on which one to go with.

When I talked to fransabank, they had :
-above mentioned no fees what so ever.
-he mentioned that I can receive interest on the money in my account every 6 months, precisely June and December forgot the exact percentage.
I think this is the maturity thing that @guitaret and @xsever were talking about, I would like to know more about this
-every month, they can duplicate the amount of my salary in my account and if I want I can use those funds paying 1.xx interest.

When I talked to Bob they had:
-the same above mentioned no fees.
-every month, they charge 2$ on my internet card, IF I use it. But they charge once per month only and I can use it as much as I want. If I don't use it they won't charge anything.
-every month, they can quadruple (4x) my salary, and I can use them if I want with a 1.xx % interest to pay.


So I'd really appreciate anyone with experience in the matter to help me make a good choice.
Oh and I totally forgot to ask both banks if they have online banking, in which I can check the balance of my current account, balance in the internet card, ability to transfer my salary from my account to use it on the internet card (or they would do that automatically idk).
I will ask them tomorrow.

Thank you.
@Avolio, out of experience, take the bank with the ATM closer to your place of living / working. Interest rates on average salaries are not worth committing to a specific bank and having to go back and forth between their ATMs if they are not well located. Noting that usually if you use an ATM that is not from your bank, you have a 5$ fee.

quick math, if you save 10% of your average salary (let's say 1500$ * 0.10 = 150 $ per month, which will end up being 1800 per year, placed at a rate of 5%, it will amount to 90$ at the end of the year (after another year), which are the equivalent of 18 ATM transactions not from your bank, which is quite frankly, not a lot.

If however you decide to only use ATMs from your bank, but they are not located on you daily commute or close to your place, then you'll spend them on fuel.
Hello @Avolio

In interest terms, you are not going to get something of worth unless you made an effort to put money aside each month as @Draguen said. After all, it is about spending the money left after saving and not about saving the money left after spending. You did not mention the currency of your salary. USD is safer in this current economy, LBP has the better return. All in all, keep some money aside in USD for God knows what will happen. If you need to get more interest, try to go for an account that is not current, ask for a sight-saving account as it offers better interest and you are still able to withdraw money when you want.

In terms of banks you mentioned, I have experience with BOB. They have great support and they do offer free online banking in which you are able to transfer between accounts, outside accounts (wire transfer) & even send/receive Western union. About internet card, I think it is 2$ per month (maybe more SMS fees) so if you guys as a group tried to negotiate your internet card for free it would be great. Please don't be tempted to join their clubs as I did, they have hidden drawback (ex: Gold club).

About what they offer in terms of salary credit, the interest is very high (about 30% year & more) so do not be tempted by this option. The only loan worth taking is related to real estate ( buying, building, renovating) or if you have to, a car loan.

Let me know if you have further concerns.