Arab Finance: Major banks in Egypt have raised annual yields on variable-rate savings certificates following the Central Bank of Egypt’s (CBE) decision last week to increase key interest rates by 100 basis points.

The National Bank of Egypt (NBE) now offers an annual return of 20.50% on its three-year Platinum variable-rate certificate, with interest paid monthly.

Meanwhile, Banque Misr set the annual return on its three-year variable-rate certificate at 20.25%, calculated under a pricing mechanism linked to the CBE’s corridor rates.

Egypt's largest private lender, Commercial International Bank Egypt (CIB), has also raised annual returns on its variable-rate certificates, with the return on its daily-payout certificate now at 20.25% from 19.25%, with a minimum annual return of 17.25%.

The higher returns reflect the certificates' direct links to interest rates set by the CBE. Their yields automatically adjust in line with changes in the overnight deposit rate, based on the margin specified for each certificate.

Unlike fixed-rate certificates, variable-rate products do not require banks to issue a new decision each time interest rates change, as CBE rate adjustments are directly reflected in customer returns under each product's pricing mechanism.

Some certificates also carry minimum return guarantees. At CIB, the minimum return stands at 17.50% for the monthly payout certificate and 17.25% for the daily payout certificate, providing customers with a degree of protection if interest rates decline in the coming period.

Returns on fixed-rate savings certificates, meanwhile, remain unchanged unless banks announce new adjustments, leaving their rates under market scrutiny in the coming period.