RANGOON — KBZ Bank will launch a new recurring deposit product in local bank branches starting from Dec. 1, said U Soe Tin Maung Zaw, the bank’s general manager. The new product, called Su Pwar, is intended to get Burmese customers more interested in saving money.
At the new product launch on Tuesday, KBZ said the recurring deposit accounts will pay a higher interest rate to customers. The Su Pwar rewards people with regular incomes who can deposit a fixed amount of their salary each month.
“This recurring deposit plan will encourage people to save money regularly and at a higher interest rate than they would receive from a savings account,” said U Soe Tin Maung Zaw. “Plus it is different from a fixed deposit account because our customers won’t need to save a huge amount of money all at once.”
In the recurring deposit plan, KBZ will pay an interest rate at least 1 percent greater than the current fixed deposit rate. The fixed deposit interest rate stands now at 8.25 percent annually, and the recurring deposit rate moves between 9.25 and 10 percent annually, depending on the savings period.
“There are two options. For example, if a person wants to save 10 million kyats (US$7,600) within a year, he will have to save around 790,000 kyats each month,” U Min Min Zaw, deputy general manager of KBZ told The Irrawaddy. “But he can’t miss a monthly deposit. If he misses a deposit or withdraws some money before the year is up, he will only receive the lower fixed deposit interest rate.”
Another option with the Su Pwar account is to choose unlimited deposits within a fixed time period. This option pays fixed interest rates of 9.25 percent for one year, 9.50 percent over two years, and 10 percent over three years.
“The minimum deposit is 10,000 kyats per month, but there is no maximum amount, so it’s an account that works for all levels of income,” said U Min Min Zaw.
KBZ bank is preparing 250 of its local branches for the Su Pwar rollout that starts on Dec. 1, and it plans to expand the service to all 430 of its branches across the country by April 1.
“Our staff members are now ready to implement this product too,” said U Min Min Zaw.
In Burma, the standard savings interest rate is 8.25 percent in all private banks that are approved under the Central Bank. However, some banks have tried to attract more customers by developing new products that offer higher interest rates.
“We can create new products like this, and these are allowed by Central Bank,” he said.
