You are in a race.
The race to financial freedom.
Your salary/business profit on one side.
Cost of goods and basic amenities on the other side.
Your salary saved in a bank account has a partner called interest rate boosting it whereas the cost of goods and basic amenities also has a partner boosting it called inflation rate.
Now let’s talk about interest rate of banks in Nigeria.
Some Nigerian banks are paying higher interest to customers for saving their money with them, while others pay lower than regulatory approved minimum rate of 1.15 percent.
Out of 21 deposit money banks that published their rates as at March 5, 2021, Heritage Bank and Suntrust Bank pays the highest interest rates on savings at an average of 4.2 percent and 4.1 percent per annum respectively.
The banks with the lowest interest payment on savings account is Providus Bank Limited. It pays average rate of 0.62 percent followed by Union Bank plc, which pays 1.07 percent to their customers.
This means your ₦100,000 saved in the bank gains ₦4,200 using Heritage Bank’s interest rate of 4.2% per annum.
₦100,000 becomes ₦104,200 in ONE YEAR.
Now let’s talk about inflation rate.
Inflation rate is defined by Oxford Dictionary as, “the rate at which prices increase over time, resulting in a fall in the purchasing value of money.”
Nigeria’s inflation rate surged to 17.71 per cent, according to latest figures by the National Bureau of Statistics.
Below is inflation rate in Nigeria per month in 2022.
At an average increase of 0.53% in 2022, Nigeria’s inflation rate could get as high as 19% before the year runs out and this means a continuous rise in prices of goods and services and reduction in purchasing power of the average Nigerian.
This means your ₦100,000 has lost ₦17,710 based on the latest inflation rate. Your ₦100,000 is now worth ₦82,290 which invariably means the goods your ₦100,000 could buy this year, due to inflation rate, the same ₦100,000 can’t buy them next year.
So here is the race.
Your ₦100,000 with interest is worth ₦104,200;
Same ₦100,000 is worth ₦82,290 because of inflation rate.
So in a year, your ₦100,000 saved in the bank based on both interest rate and inflation rate is actually worth ₦86,490 (₦82,290) after inflation + (₦4,200) interest per annum; which means your money is actually loosing value saved in the bank.
Now here is the OmegaPro question.
Do you save money in the bank and make 4.2% interest per YEAR or partner with OmegaPro and make up to 10% per MONTH and up to 300% ROI in 16 MONTHS?
The choice is yours but in all you do, ensure the interest rate on your money or investments outpaces inflation rate or you lose the race to financial freedom.