Banks offer a range of savings products that let customers invest their savings and earn a periodic return. Fixed-rate certificates are among the options that help customers plan their savings over the medium and long term, with the return known for the certificate's entire tenor.

In this report, we review the key details of the National Bank of Egypt (NBE) monthly 5-year certificate and the Banque Misr fixed 5-year certificate, covering tenor, interest rate, minimum purchase and redemption terms, and calculate the expected return on EGP 500,000 over 5 years.

Features and details of the NBE monthly 5-year certificate

  • Tenor: 5 years.

  • Interest rate: 14.25% a year.

  • Payout frequency: monthly.

  • Minimum purchase: EGP 1,000 and multiples thereof.

  • Rate type: fixed for the certificate's entire tenor.

Interest starts accruing from the month following the month of purchase. Customers can borrow against the certificate at the bank's branches in line with applicable rules, and credit cards can be issued against the certificate. The certificate cannot be redeemed before 6 months from its effective date; after that, it can be redeemed under the bank's published terms and conditions.

Features and details of the Banque Misr fixed 5-year certificate

  • Tenor: 5 years.

  • Interest rate: 12.25% a year.

  • Payout frequency: monthly.

  • Minimum purchase: EGP 1200

  • Rate type: fixed for the certificate's entire tenor.

Eligibility: individuals only. The certificate can be redeemed in full or in part after 6 months from its issue date. Calculating the return on EGP 500,000

Investing EGP 500,000 in the NBE monthly 5-year certificate at a fixed annual rate of 14.25%, paid monthly, yields an approximate monthly return of EGP 5,937.50, for a total return of EGP 356,250 over 5 years, assuming the terms remain unchanged throughout and the certificate is not redeemed.

By contrast, investing the same amount in the Banque Misr 5-year certificate at an annual rate of 12.25%, paid monthly, yields an approximate monthly return of EGP 5,104.17, for a total return of EGP 306,250 over 5 years.

The difference in monthly return between the two certificates is therefore about EGP 833.33 in favor of the NBE monthly 5-year certificate, while the difference in total return over 5 years is about EGP 50,000.

Banky's view

The comparison shows the NBE monthly 5-year certificate comes out ahead, offering a fixed annual rate of 14.25% against 12.25% for the Banque Misr 5-year certificate. It also has the lower minimum: NBE lets customers open the certificate from EGP 1000, against 1200 for the Banque Misr 5-year certificate.