Bank to pay advance interest for fixed deposit accounts

Jamii Bora Bank CEO Timothy Kabiru during the Credit round table forum at the bank's headquarters in Nairobi. [Jeckonia Otieno/Standard]

Even as the Covid-19 pandemic continues to wreak havoc, banks have taken to innovation to stay in business.

Jamii Bora Bank has moved to woo fixed deposit clients through enhanced interest terms.

The new product dubbed, Bora Plus Fixed Deposit Account, allows customers to earn and be paid interest in advance instead of being paid upon maturity.

However, customers who prefer to have their interest paid upon maturity still have that option. Traditionally, fixed-deposit accounts earn interest at maturity.

The bank’s acting CEO Timothy Kabiru says the product will be attractive to customers who have funds that are earning little interest in other instruments.

"It is also attractive in that the client will not have to wait for the conventional period of deposit maturity to enjoy the interest earned on their deposit, while still maintaining funds for emergencies," Kabiru says.

The product is targeted at individuals, investment groups and companies who can put aside at least Sh500,000 for a minimum period of three months.

The bank notes that some customers may need to uplift their deposit before the maturity period due to unforeseen circumstances.

In deserving cases, the bank would deduct interest already paid upfront for the yet-to-be served period creating a win-win situation for both the lender and the customer.