Interest rates are at an ALL-TIME Low: What to do?


We are in a time where interest rates in Nigeria are being reviewed and slashed daily. Last week, a leading Nigerian bank offered its clients 3% for an investment of over N200m (two hundred million naira). As if that is not ridiculous enough, this came with a caveat stating the 3% given can be further slashed if the situation becomes worse. Interest rates are at an all-time low. Rates are already negative numbers in some nearby climes (very scary!). What to do? Here are a few;

Simply keep your funds in a high-interest yielding savings account

Okay…bankers will not like this one. Every Nigerian bank has a special type of savings account that positions customers to earn high-interest returns. For instance, Fidelity Bank has the HYSA Savings Account. This is on deposit volume and non-withdrawals basis, this should be easy if you follow these guidelines for effective saving. Now that interest rates are at an all-time low, this is the time to turn to accounts like this. Usually, these types of accounts have two key features:

  1. Mandates the customer to maintain a high minimum operating balance at all times.
  2. Discourages frequent withdrawals.
Save for high yield.

As we know, a bank’s default savings account should have a minimum interest yield rate of 4.05%. This account type usually yields more. In some banks it’s up to 5.45% or even 6%, depending on your volume of deposit. Most fixed deposits are not more than 3%. Simply walk into your bank/call your account officer and request for this account type to be opened for you. Collapse those lazy term deposit investments and turn to this.

Venture into Foreign Securities

People who understand the dynamics of currencies and different economies have started moving their hard-earned funds to foreign countries. This will be beneficial especially now that interest rates are at an all-time low. Here is how to key into this:

  1. Study neighbouring countries’ economic situation
  2. Check for their transaction costs
  3. Confirm their regulatory infractions
  4. Re-position your funds to make good deals from such a country.

For instance, the Kenyan shilling to Nigerian Naira is 1 – 3.6, to the Gambian Dalasi, 1 – 7.1. The naira’s exchange rate to the Libyan Dinar is a whooping N258 naira! Truth is that neighbouring African economies are waxing stronger.

“But despite the turmoil, Libya’s stock market is getting ready for the first launch of Islamic investment funds, the most prominent bourse debut since the eight-month uprising”. – Business Insider

Fresh off-turmoil countries like Libya and South Sudan badly need reconstruction. As such, there are hugely numerous opportunities in there. This is for investors who are willing to take up a lot of risks, especially now that interest rates are at an all-time low. Libya, in particular, is a potentially rich nation that sits on Africa’s largest proven oil reserves. As quoted by Business Insider in the same article,

“Despite the turmoil, Libya is a potentially rich nation, sitting on Africa’s largest proven oil reserves. Western brands such as Nike and Marks & Spencer have set shop in the same upmarket Tripoli district as the stock market”. – Business Insider

Interest-rates-are-at-an-ALL-TIME-Low-destroyed libya
Credit: Global Research

Invest in long-maturity foreign bonds

Interestingly, bonds increase only when interest rates fall – in normal climes. You are likely to find a premium high-yielding coupon bond in the foreign market today. You only need to make a thorough search, Google can help with this. A good example of a high coupon bond is the Eurobond. As a friend would say, this a low hanging fruit. Securing a bond investment that pays that high while other rates are in a dwindling spiral is a huge bonanza, especially now that Interest rates are at an all-time low.


The biggest risk involved in dealing bonds is that, in the future, bond issuers can authorize processors to retire your high-yielding bonds prematurely and replace them with low coupon bonds.

Don’t buy stocks

Although the equity market is an adventurous one, the risks are relatively high in these hard times. Not all stocks constantly pay the promised high-dividend yield.


Requisite fulfillment of dividends to stock buyers is even harder now that interest rates are at an all-time low.

Warning: Kindly take this article as a piece of investment advice. You may not rely on it for your investment decisions as the author is not licensed to provide investment advice.

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