Interest on Certificates of Deposit Rises to 23%
EghtesadOnline: EcoIran interpreted the latest CBI move as paving the way for the much-debated higher deposit rates. The website quoted one informed source as saying that the CBI will soon allow banks to increase interest on deposits by 5%.
The Executive Board of the Central Bank of Iran said banks can raise the interest rate on certificates of deposit (CDs) up to 23%.
Mostafa Qamari Vafa, head of the CBI public relations department, wrote on Twitter that "Banks can issue certificates of deposit with 23% interest…Details about the board's decision will be announced in the coming days."
Certificates of deposit provide a fixed interest rate in exchange for the customer agreeing to keep a lump sum untouched for a predetermined period. Normally the time limit is 12 months, but if a client wants to withdraw, the interest rate is cut as a penalty.
Data published by Rade, a local website involved in comparing banking services, shows that all banks had been offering CDs at 18%.
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