Bank savings account interest rates

I am glad you made the right choice @AVOlio and as I see this is a much better package than the one we have (or don't) for employees salary domiciliation at Audi.

Account fees per month 3$ ( 1$ service charge, 1$ SMS fees and another 1$ (BVE) we do not have any idea what it is)
Credit card: free but interest is 1.95% per month on POS & for cash: 2.59% instantly then 1.95% per month.
Internet card: 20$/year + 1$ SMS fees per month

The worst part is their evil value date:
On account credit, the value date is 1 day after and on account debit the value date is 1 day before and so if you withdraw money the same day you get your salary, you get interest charges (as if they have lent you the withdrawn money for 1 day).
The worst example of this bad practice: I took a personal loan and for the silly me I withdrew it in cash the same day it got credit to my account to find out that I got 7$ interest charges. On top of (interest fees, stamp fees, file fees, insurance fees, staff commision fees), I get interest on top of the interest.

I know this information was not requested but I wanted to share my experience with Audi to add value to this thread so it can be used as a guidebook for the beautiful community we have here and maybe some visitors.

Cheers

Hello

I noticed many banks are raising their interest rates on saving accounts, some are giving 16% over 5 years on LBP.
And its not on a huge amount of money (A bank offered 15% annual rate over 5 years for 30k LBP (and 10% over 1 year on same amount).

What do you think about these rates?
Are we close to an economic Collapse?
In this case would it be clever to wait and see if the rates rise even higher before putting money in a saving account?

Hello Sero,
Thanks for raising this I also have the same question, how wise it is now to block money in LBP for 5 years and the current economic situation is so bad ?
I am not sure if it is even better to put your money in USD and get lower interest and stay safe ?
Or may be block them in LBP/Monthly and Monitor to have a little higher rate and a small chance to convert them to USD in case of any economy collapse.
Let see what other member think it s best to do at the moment ?

I've been thinking about this and it's hard for me to completely grasp the situation. I hope other members that have deeper knowledge about economics will step in to enlighten us.

Here's what I see:

- Sharp rise of interest rates as discussed in this topic
- Lebanese gov bonds trading at a discount (95 cents on the dollar for short-medium term), which hints that the market thinks the government will default on its debt obligations
- Nominal debt at 152% of GDP. Third-highest in the world.
- No government formation in sight means no budget for 2019 and unclear handling of outstanding debt
- Every business-owner I know complaining that "business is slow"
- Housing loans on hold, real-estate dip

sero wroteHello

I noticed many banks are raising their interest rates on saving accounts, some are giving 16% over 5 years on LBP.
And its not on a huge amount of money (A bank offered 15% annual rate over 5 years for 30k LBP (and 10% over 1 year on same amount).

What do you think about these rates?
Are we close to an economic Collapse?
In this case would it be clever to wait and see if the rates rise even higher before putting money in a saving account?

@sero, could you please mention or DM me the name ofnthe banks proposing these interest rates? I might block a bit for a year or so

Draguen wrote@sero, could you please mention or DM me the name ofnthe banks proposing these interest rates? I might block a bit for a year or so

Done!

joe2k17 wrotehow wise it is now to block money in LBP for 5 years and the current economic situation is so bad ?

I have a loan in LBP with maturity 20 years.
The way I see it, I can put LBP money in a saving account to pay part of the loan's fees.
In this way even if an economic collapse took place, the saving account money will still pay for the loan money.

samer wrote

I've been thinking about this and it's hard for me to completely grasp the situation. I hope other members that have deeper knowledge about economics will step in to enlighten us.

Here's what I see:

- Sharp rise of interest rates as discussed in this topic
- Lebanese gov bonds trading at a discount (95 cents on the dollar for short-medium term), which hints that the market thinks the government will default on its debt obligations
- Nominal debt at 152% of GDP. Third-highest in the world.
- No government formation in sight means no budget for 2019 and unclear handling of outstanding debt
- Every business-owner I know complaining that "business is slow"
- Housing loans on hold, real-estate dip

Exactly!
I can't find a single positive explanation for the current economy to get better

Some say CEDRE (this is the 3rd one if I'm not mistaken, what did we see from the first 2?), others say when war ends in Syria Lebanon will boom (but probably the Syrian gov will only allow a few Lebanese ally business men to benefit from this), others say president Aoun will not accept an economic collapse to take place during his ruling (I think its not his call), others say we have Riad Salemeh (the guy is smart, but won't be able to handle this due to the amount of corruption we have), others say we have gas/petrol now (lol)....

joe2k17 wroteHello Sero,
Thanks for raising this I also have the same question, how wise it is now to block money in LBP for 5 years and the current economic situation is so bad ?
I am not sure if it is even better to put your money in USD and get lower interest and stay safe ?
Or may be block them in LBP/Monthly and Monitor to have a little higher rate and a small chance to convert them to USD in case of any economy collapse.
Let see what other member think it s best to do at the moment ?

15% yearly (on 5 years CDs) return is extremely high and to make a decision you have to put it under the umbrella of high-risk/high reward. To be sure I am not understating: this interest is soo good that if you have 80k only you can make the monthly average salary of 1k/month in Lebanon. Being an investment/finance fan, this is a very high return and there is no other legal way to make this sum in a small capital.

samer wroteI've been thinking about this and it's hard for me to completely grasp the situation. I hope other members that have deeper knowledge about economics will step in to enlighten us.

Here's what I see:

- Sharp rise of interest rates as discussed in this topic
- Lebanese gov bonds trading at a discount (95 cents on the dollar for short-medium term), which hints that the market thinks the government will default on its debt obligations
- Nominal debt at 152% of GDP. Third-highest in the world.
- No government formation in sight means no budget for 2019 and unclear handling of outstanding debt
- Every business-owner I know complaining that "business is slow"
- Housing loans on hold, real-estate dip

No one on earth can know how close we are to an economic collapse, this is like my old neighbor who was diagnosed with terminal cancer and had 6 months to live, this was 15 years ago and he is still living his normal life without undergoing any treatment. The doctors who predicted his death are as highly experienced as the economists who are predicting the collapse since years ago. The conclusion: No one ever knows the maximum stress any system can take (financial or biological or...), this is not science this is merely the statistical model being put into reasoning, this is why those kind of predictions are never accurate. I can tell that only people in high power know about any coming collapse but only before a short period of time and to prove it to you: if you track down major economic breakdowns in any economy/stock in the world in the last 50 years you can see that billionaires have lost big money to this. Those people hire professionals to do their study but when the big wave comes everyone goes down.

Everyone has to make his own decision, hooray for the people with no cash for the piece of mind they have now. But for the people having cash in Lebanon, I am not sure of the alternatives they have, not everyone considers it convenient to put their money in a bank outside the country. Buy small apartments, rent them and keep some money aside for emergencies. Any ideas guys?

Thank you for your input Guitaret. I highly appreciate the contribution.

No one ever knows the maximum stress any system can take (financial or biological or...), this is not science this is merely the statistical model being put into reasoning, this is why those kind of predictions are never accurate

Fully agreed. I think this statement is key, and I wonder whether one's portfolio should be structured with this statement in mind. Make sure that if (or when) the banks go under, you're not bankrupt.

Update

A bank which previously offered 15% for 30k LBP over 5 years, just called to inform me that they increased the rate to 16%!
and 11.5% over 1 year.

I'm going to wait till beginning 2019 to see how things goes.

sero wroteUpdate

A bank which previously offered 15% for 30k LBP over 5 years, just called to inform me that they increased the rate to 16%!
and 11.5% over 1 year.

I'm going to wait till beginning 2019 to see how things goes.

Why the specific amount of 30k LBP.
I don't understand.
What if less than 30k or more than 30k?

AVOlio wroteWhy the specific amount of 30k LBP.
I don't understand.
What if less than 30k or more than 30k?

30k LBP is the minimum amount to benefit from the interest rate (most banks set it to 30k, it surely can be more, but not less)

sero wrote
A bank which previously offered 15% for 30k LBP over 5 years, just called to inform me that they increased the rate to 16%!
and 11.5% over 1 year.
.

Bank Audi gave me the same offer but the weird part is that the money needed to be converted from USD to LBP in order to be qualified for this plan.

Guitaret wroteBank Audi gave me the same offer but the weird part is that the money needed to be converted from USD to LBP in order to be qualified for this plan.
.

Yes, this is exactly what SGBL informed me also (USD to LBP)
Economically, what does this mean?

sero wrote

Guitaret wroteBank Audi gave me the same offer but the weird part is that the money needed to be converted from USD to LBP in order to be qualified for this plan.
.

Yes, this is exactly what SGBL informed me also (USD to LBP)
Economically, what does this mean?

They want to get people to buy LBP instead of choosing the other safe options of USD. They think they can convince people to sell their USD => more USD in the market/banks/central bank (frozen) => Central bank has more foreign currencies => LBP is safer.
If all people panic & start buying USD (or other stocks, or transfer money outside) the LBP will collapse for sure.

But I did not get what I need to do to get the deal, should I make a transfer of 20k $ so they can do the exchange themselves?

Hello Community,

Any idea what are the current bank interest on LBP and USD and which Banks are giving the best interests at the moment ? are they still giving 15% and 16% like before for converting USD to LBP?

BR//