Capitec Bank has slashed the interest it pays on balances in its main transactional accounts in a move designed to get its clients to move money into dedicated savings accounts instead.
Until the change in February, it was paying as much as 5.6% on balances in main accounts. This is now down to a flat 2.25%, regardless of the balance. This doesn’t affect a typical account holder with a modest positive balance (up to R25 000).
This also follows a subtle change where its GlobalOne account shifted from a hybrid transaction/savings account to what it wants customers to think of as a ‘main account’ for transactions, with savings plans separated.
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Account holders can open up to four free savings plans on the Capitec app. These include Access Anytime, Notice Deposits, and Fixed-Term Savings options. The first of these replaces its flexible savings plan and is similar to savings ‘pocket’-type offerings from other banks.
These changes must be seen in the context of a decrease in the repo rate (and the prime lending rate) of 75 basis points between last February and this year.
That flat interest rate of 2.25% on the Main Account has actually increased, relatively, for typical so-called ‘lazy’ balances (anything under R25 000). Had it reduced this in line with the repo rate changes, it would’ve dropped to 1.5% now.
| Capitec interest changes | ||||
| Nominal interest rate | Main account | Access Anytime Savings Plan | ||
| Feb 2024 | Feb 2025 | Feb 2024 | Feb 2025 | |
| R0 – R24 999 | 2.25% | 2.25% | 3.5% | 2.25% |
| R25 000 – R99 999 | 3.35% | 2.25% | 4.5% | 3.5% |
| R100 000 – R249 000 | 4.85% | 2.25% | 5.75% | 5% |
| >R250 000 | 6.4% | 2.25% | 7.25% | 6.5% |
| Repo rate | 8.25% | 7.5% | 8.25% | 7.5% |
* Data from Capitec Bank website and other public sources
Of course, at above the R25 000 level, one should normally be putting a chunk of money in a dedicated savings account. Most other banks, with the exception of Discovery Bank, don’t pay interest on positive balances in transactional accounts.
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Discovery pays a base rate of 0.1% on its various transactional accounts, which can be boosted to up to 1.6% depending on one’s Vitality Money status (Blue to Diamond) and which primary product you hold (this top level is only achievable if you hold a Discovery Bank Suite product, effectively its bundled offering of an account and credit card).
Capitec’s interest rates on its Anytime Access savings plan should be compared against those of its notice deposit products, as they are fairly modest in contrast.
| Nominal interest rate | Access Anytime Savings Plan | 7-day Notice Deposit Account | 32-day Notice Deposit Account |
| R0 – R24 999 | 2.25% | 3.25% | 6.75% |
| R25 000 – R99 999 | 3.5% | 6.75% | 7.25% |
| R100 000 – R249 000 | 5% | 7% | 7.5% |
| >R250 000 | 6.5% | 7.25% | 7.75% |
For a Capitec account holder who may have R50 000 in emergency savings or in savings towards a specific goal, the seven-day notice deposit sees nearly double the interest paid. This suggests that Capitec is encouraging this category of customers to rather lock up their funds in a notice account (which benefits the bank from a funding point of view).
It only launched the notice accounts in July 2024, and by the end of August, these had balances totalling R1.2 billion across 226 000 accounts.
At the end of August, Capitec had 22.8 million active clients, of which 8.5 million were fully banked. Its savings (-only) clients were around the nine million level.
It’s those fully banked account holders that it is targeting with these specific savings products, particularly the notice deposits, which are stickier than money in a pocket or transactional account. It notes that clients with inflows in excess of R50 000 per month are up 26% since August 2023.
At August 2024, total deposit balances (across fixed and notice deposits and call savings) at the retail bank were nearly R150 billion.
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